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Act No. 12 of 2005

THE HIMACHAL PRADESH VALUE ADDED TAX

ACT, 2005.

(AS INTRODUCED IN THE LEGISLATIVE ASSEMBLY)

A
BILL

to re-enact the law to provide for the levy of a value added tax on
the sales or purchases of goods in the State of Himachal
Pradesh and for certain other matters connected therewith.

BE it enacted by the Legislative Assembly of Himachal

Pradesh in the Fifty-sixth Year of the Republic of India, as follows: -

CHAPTER -I
PRELIMINARY

Short title and 1. (1) This Act may be called the Himachal Pradesh
commencement.
Value Added Tax Act, 2005.

(2) It shall come into force from such date as the

Government may, by notification, appoint.

Definitions. 2. In this Act, unless there is anything repugnant in the

subject or context, --

(a) Act means the Himachal Pradesh Value Added

Tax Act, 2005.

(b) Assessing Authority means any person

appointed by the State Government under sub-section
(2) of section 3 to make any assessment under this Act;

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(c) business includes, -

(i) any trade, commerce, manufacture,

any adventure or concern, in the
nature of trade, commerce or
manufacture, whether or not such
trade, commerce, manufacture,
adventure or concern is carried on
with a motive to make profit and
whether or not any profit accrues
therefrom; and
(ii) any transaction in connection with or
ancillary to such trade, commerce,
manufacture, adventure or concern;

(d) capital goods means plant, machinery or

equipment used in the process of manufacturing,
processing and packing of goods for sale excluding civil
structures as may be prescribed;

(e) casual dealer means any person who carries on

occasional transactions of business of buying, selling,
supplying or distributing goods whether for cash,
deferred payment, commission, remuneration or other
valuable consideration;

(f) Commissioner means the Excise and Taxation

Commissioner appointed under sub-section (1) of
section 3;

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(g) dealer means any person who carries on (whether

regularly or otherwise) the business of buying, selling,
supplying or distributing goods, directly or indirectly,
for cash, or for deferred payment, or for commission,
remuneration or other valuable consideration, and
includes,--

(i) a local authority, a body corporate, a

company, a co-operative society or other
society, club, firm, Hindu Undivided Family
or other association of persons which
carries on such business;

(ii) a factor, broker, commission agent, a

dealers agent or any other mercantile
agent, by whatever name called;

(iii) an auctioneer who carries on the business

of selling or auctioning goods belonging to
any principal, whether disclosed or not, and
whether the offer of the intending purchaser
is accepted by him or by the principal or a
nominee of the principal;

(iv) every person engaged in the business of,--

(a) transfer, otherwise than in

pursuance of a contract, of
property in any goods for cash,
deferred payment or other

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valuable consideration;

(b) transfer of property in goods

(whether as goods or in some
other form) involved in the
execution of a works contract;

(c) delivery of goods on hire-

purchase or any system of
payment by instalments;

(d) transfer of the right to use any

goods for any purpose (whether
or not for a specified period) for
cash, deferred payment or other
valuable consideration;

(e) supply of goods by any

unincorporated association or
body of persons to a member
thereof for cash, deferred
payment or other valuable
consideration; and

(f) supply, by way of or as part of

any service or in any other
manner whatsoever, of goods,
being food or any other article for
human consumption or any drink
(whether or not intoxicating)

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where such supply or service, is

for cash, deferred payment or
other valuable consideration;

Explanation (I). -- Every person who acts as an agent,

in Himachal Pradesh, of a dealer residing outside this
State and buys, sells, supplies or distributes goods in
the State or acts on behalf of such dealer as

(i) a mercantile agent as defined in the Sale of

Goods Act, 1930; or
3 of 1930
(ii) an agent for handling of goods or documents
of title relating to goods; or
(iii) an agent for the collection of the payment of
the sale price of goods or as a guarantor for
such collection or payment;

and every local branch or office in Himachal Pradesh of

a firm registered outside this State or a company or
other body corporate, the principal office or
headquarters whereof is outside this State, shall be
deemed to be a dealer for the purpose of this Act.

Explanation (II). -- Every department, or its subordinate

offices, of a Government which whether or not in the
course of business, buys, sells, supplies or distributes
goods, directly or otherwise, for cash or for deferred
payment or for commission, remuneration or other
valuable consideration, shall, except in relation to any
sale, supply or distribution of surplus, unserviceable or

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old stores or materials or waste products or obsolete or

discarded machinery or parts or accessories thereof,
be deemed to be a dealer for the purpose of this Act.

Explanation (III). -- For the purpose of this clause

Government shall include the Central Government or
the Government of any other State or Union Territory.

(h) declared goods shall have the meaning assigned

to that expression in clause (c) of section 2 of the
74 of 1956. Central Sales Tax Act, 1956;

(i) Deputy Excise and Taxation Commissioner

means the Deputy Excise and Taxation
Commissioner, appointed under sub-section (1) of
section 3 of this Act, to assist the Commissioner
and shall also include the Joint/Additional Excise
and Taxation Commissioner;

(j) document includes title deeds, writing or

inscription, statement of account and data stored
electronically in whatever form and the like that
furnishes evidence;

(k) goods means every kind of movable property

(other than news-papers, actionable claims, stocks
and shares and securities) and includes live stock,
all materials, commodities and articles and every
kind of property (whether as goods or in some other
form) involved in the execution of a works contract,

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and all growing crops, grass, trees or things

attached to or forming part of the land which are
agreed to be severed before sale or under the
contract of sale;

(l) import means the bringing of goods into Himachal

Pradesh from any place outside its territorial
jurisdiction;

(m) input tax means the amount paid or payable by

way of tax under this Act, by a purchasing
registered dealer to a selling registered dealer on
the purchase of goods in the course of business for
re-sale, or for use in the manufacture of taxable
goods or for use as containers or packing material
or for the execution of works contract;

(n) invoice means a document listing goods with

price, quantity, tax involved and other particulars as
may be prescribed and includes a bill, cash
memorandum, slip, receipt or similar record,
regardless of its form;

(o) motor spirit means any inflammable hydrocarbon

including any mixture of hydrocarbons or any liquid
containing hydrocarbon, which is ordinarily used for
providing reasonably efficient motive power for any
form of motor vehicle;
(p) notification means notification published in the
Rajpatra, Himachal Pradesh;

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(q) output tax output tax in relation to any registered

dealer means the tax payable under this Act in
respect of any taxable sale or purchase of goods
made by that dealer in the course of his business;

(r) prescribed means prescribed by rules made under

this Act;

(s) purchase with all its grammatical or cognate

expressions, means the acquisition of goods for cash
or deferred payment or other valuable consideration
otherwise than under a mortgage, hypothecation,
charge or pledge and includes
(i) the transfer, otherwise than in pursuance of a
contract, of property in any goods for cash,
deferred payment or other valuable
consideration;
(ii) the transfer of property in goods (whether as
goods or in some other form) involved in the
execution of a works contract;
(iii) the delivery of goods on hire-purchase or any
system of payment by instalments;
(iv) the transfer of the right to use any goods for
any purpose (whether or not for a specified
period) for cash, deferred payment or other
valuable consideration;
(v) the supply of goods by any unincorporated
association or body of persons to a member
thereof for cash, deferred payment or other

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valuable consideration;

(vi) the supply, by way of or as part of any service

or in any other manner whatsoever, of goods,
being food or any other article for human
consumption or any drink (whether or not
intoxicating), where such supply or service, is
for cash, deferred payment or other valuable
consideration;
and such transfer, delivery or supply of any goods
shall be deemed to be a sale of those goods by the
person making the transfer, delivery or supply and a
purchase of those goods by the person to whom such
transfer, delivery or supply is made;

(t) registered means registered under this Act;

(u) reverse input tax means that amount of input tax

credit in relation to any goods for which input tax
credit has been availed of, but which shall stand
reversed in the circumstances specified in sub-
sections (9) and (10) of section 11;

(v) sale means any transfer of property in goods for

cash or for deferred payment or for any other valuable
consideration other than a mortgage, hypothecation,
charge or pledge, and includes

(i) the transfer, otherwise than in pursuance

of a contract, of property in any goods for

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cash, deferred payment or other valuable

consideration;

(ii) the transfer of property in goods

(whether as goods or in some other
form) involved in the execution of a
works contract;

(iii) the delivery of goods on hire-purchase or

any system of payment by instalments;

(iv) the transfer of the right to use any goods

for any purpose (whether or not for a
specified period) for cash, deferred
payment or other valuable consideration;

(v) the supply of goods by any unincorporated

association or body of persons to a member
thereof for cash, deferred payment or other
valuable consideration;

(vi) the supply, by way of or as part of any

service or in any other manner whatsoever,
of goods, being food or any other article for
human consumption or any drink (whether
or not intoxicating), where such supply or
service, is for cash, deferred payment or
other valuable consideration;
and such transfer, delivery or supply of any goods shall
be deemed to be a sale of those goods by the person

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making the transfer, delivery or supply and a purchase

of those goods by the person to whom such transfer,
delivery or supply is made;

(w) Schedule means a Schedule to this Act;

(x) section means the section of this Act;

(y) State Government or Government means the

Government of Himachal Pradesh;

(z) tax or value added tax means the tax on the

sale or purchase of goods, levied under section 6
or 7;

(za) tax period means the period prescribed for filing

a return;

(zb) timber includes trees when they have fallen, or

have been felled or agreed to be felled and all
wood whether cut up or fashioned or hollowed out
for any purpose or not;

(zc) Tribunal means the Tribunal established under

section 44;

(zd) turnover means the aggregate amount of sales,

purchases and parts of sales and purchases made
by any dealer during the given period and includes
any sum charged, on account of freight, storage,
demurrage, insurance and for anything done by the
dealer in respect of the goods at the time of or

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before delivery thereof;

Explanation (I). The proceeds of any sale made

outside Himachal Pradesh by a dealer,
who carries on business both inside and
outside Himachal Pradesh, shall not be
included in the turnover.
Explanation (II). The turnover of any dealer in respect
of transactions of forward contracts, in
which goods are actually not delivered,
shall not be included in the turnover.
Explanation (III). The proceeds of sale of any goods
on the purchase of which tax is leviable
under this Act, or the purchase value of
any goods on the sale of which tax is
leviable under this Act, shall not be
included in the turnover.
Explanation (IV). The sum allowed as cash discount
according to ordinary trade practice shall
not be included in the turnover.

Explanation (V).The amount to be included in the

turnover in respect of delivery of goods
on hire purchase or any system of
payment by instalments shall be the total
sum payable by the hirer under the hire-
purchase agreement in respect of the
goods so delivered, or the amount
actually paid in instalments.

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Explanation (VI). The amount to be included in the

turnover in respect of transfer of
property in goods (whether as goods or
in some other form) involved in the
execution of works contract shall be its
sale price.
(ze) vehicle includes any carriage or conveyance
used on land, water or air; and

(zf) year means the financial year.

CHAPTER-II
TAXING AUTHORITIES

Taxing 3. (1) For carrying out the purposes of this Act, the State
authorities.
Government may, by notification, appoint a person to be
the Commissioner and such other persons with such
designations, as it thinks fit.

(2) The State Government may, by notification, appoint

as many Assessing Authorities as it may think fit.

(3) The Commissioner and other persons appointed

under sub-section (1) shall perform such functions and
duties as may be required by or under this Act or as
may be conferred, by the State Government, by
notification.

(4) The jurisdiction of the Commissioner and other

officers posted at the State Headquarters shall extend
to the whole of the State of Himachal Pradesh, and the

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jurisdiction of other officers or officials shall, unless the

State Government otherwise directs, by notification,
extend to the districts or the areas of the districts for
which they are for the time being posted.

CHAPTER-III
INCIDENCE, LEVY AND RATE OF TAX

Incidence of 4. (1) Subject to the provisions of sections 6, 7 and sub-

taxation.
section (2) of section 16, every dealer (except one
dealing exclusively in goods declared tax free under
section 9) whose gross turnover during the year
immediately preceding the commencement of this Act
exceeded the taxable quantum shall be liable to pay
tax under this Act on all sales effected and purchases
made after the coming into force of this Act.

(2) Every dealer, who does not deal exclusively in

goods declared to be tax free under section 9, shall be
liable to pay tax under this Act from the date on which
his gross turnover during any year first exceeds the
taxable quantum.

(3) Notwithstanding anything contained in sub-sections

(1) and (2) no tax on the sale of any goods shall be
levied if a tax on their purchase is levied under this Act.

(4) Every dealer who has become liable to pay tax

under this Act shall continue to be so liable until the
expiry of three consecutive years during each of which

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his gross turnover has failed to exceed the taxable

quantum and such further period after the date of such
expiry as may be prescribed, and on the expiry of this
later period his liability to pay tax shall cease.

(5) Every dealer, whose liability to pay tax has ceased

under the provisions of sub-section (4), shall again be
liable to pay tax under this Act with effect from the date
on which his gross turnover first exceeds the taxable
quantum.

(6) In this Act, the expression taxable quantum

means, --
(a) in relation to any dealer who imports for
sale or use in manufacturing or processing
any goods in Himachal Pradesh: Rupee 1/-;
(b) in relation to any dealer, who himself
manufactures or produces any goods for
sale: Rs. 2,00,000/- ;
(c) in relation to any dealer, who runs a hotel,
restaurant, bakery or other similar
establishment wherein food preparations
including tea, are served: Rs.2,00,000/- ;
(d) in relation to any particular classes of
dealers not falling within clauses (a), (b)
and/or (c), such sum as may be prescribed;
or
(e) in relation to any other dealer:
Rs.6,00,000/-:

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Provided that the registration of dealers

already registered under this clause shall not be
cancelled until their turnover in each of three
consecutive years does not entitle them to cancellation
under sub-section (4).

Liability of a 5. A dealer registered under the Central Sales Tax Act,

dealer
1956 who is not liable to pay tax under section 4 shall
registered
under the nevertheless be liable to pay tax under this Act on any
Central Sales
sale or purchase made by him inside the State of
Tax Act, 1956.
(74 of 1956) Himachal Pradesh:

Provided that nothing herein shall apply to a

dealer who deals exclusively in goods declared tax free
under section 9.

Levy of tax. 6. (1) Subject to the provisions of this Act, there shall be
levied a tax, --
(a) at every point of sale in respect of the
goods specified in the second column of
Schedule A,
(b) at the prescribed points of purchase in
respect of goods specified in the second
column of Schedule C, and
(c) at the first point of sale in respect of the
goods specified in the second column of
Schedule D,
on the taxable turnover of a dealer, at the rates as
specified in the respective Schedules or at such rates

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not exceeding 100 paise in a rupee as the State

Government may, by notification, direct:
Provided that the State Government may
notify different rates in respect of different goods or
classes of goods:
Provided further that the rate of tax in respect
of declared goods shall not exceed the maximum rate
74 of 1956
of tax specified in clause (a) of section 15 of the Central
Sales Tax Act, 1956:
Provided further that subject to furnishing of
a declaration as may be prescribed, the Government
may, by notification, reduce the rate of tax levied under
sub-section (1) upto 4% in respect of goods sold to the
Government, not being a registered dealer, for captive
use in telecommunication network, or in the generation
or distribution of electricity or any other form of power.

(2) Notwithstanding anything contained in this section,

where any goods are sold in container or are packed in
any packing material, the rate of tax applicable to such
container or packing material, shall, whether the price of
the container or packing material is charged separately
or not, be the same as is applicable to the goods,
contained or packed therein and the turnover in respect
of the container and packing material, shall be included
in the turnover of such goods. Where the goods, sold in
container or packed in packing material are tax free, the
sale of such container or packing material shall also be
tax free.

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(3) In this Act, the expression taxable turnover means

that part of the dealers gross turnover during any period
which remains after deducting therefrom ---
(a) his turnover during that period on---
(i) the sale of goods declared tax free
under section 9;
(ii) sale or purchase of goods falling under
section 58; and
(iii) such other sales or purchases as may
be prescribed; and
(b) the amount of tax included in the gross
turnover.

Levy of 7. Notwithstanding anything contained in this Act, every

presumptive
registered dealer, whose gross turnover in any year
tax.
does not exceed such amount as may be prescribed,
shall, in lieu of the tax payable under this Act, pay
presumptive tax on the entire taxable turnover of sales
or purchases, as the case may be, at such rates, not
exceeding the rates specified in section 6, as the State
Government may, by notification, direct, and subject to
such conditions and restrictions and in such manner as
may be prescribed:
Provided that no input tax credit shall be
available to such dealer:
Provided further that no registered dealer,
who imports goods for sale or use in manufacturing or
processing any goods for sale, shall be entitled to make
payment of presumptive tax under this section.

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Levy of 8. Where a dealer who is liable to pay tax under this

purchase tax
Act purchases any goods other than those specified in
on certain
goods in Schedule B from any source, and --
certain
(a) uses them within the State in the
circumstances.
manufacture of goods specified in
Schedule B, or

(b) uses them within the State in the

manufacture of any goods, other than
those specified in Schedule B, and
sends the goods so manufactured
outside the State in any manner
otherwise than by way of sale in the
course of inter-State trade or commerce
or in the course of export out of the
territory of India, or

(c) uses such goods for a purpose other

than that of resale within the State or
sale in the course of inter-State trade or
commerce or in the course of export out
of the territory of India, or

(d) sends them outside the State in any

manner otherwise than by way of sale
in the course of inter-State trade or
commerce or in the course of export out
of the territory of India,
and no tax is payable on the purchase of such goods

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under any other provisions of this Act, there shall be

levied a tax on the purchase of such goods equal to
the rate as notified, under sub-section (1) of section 6,
by the State Government.

Tax free 9. No tax shall be payable on the sale of goods specified

Goods.
in the second column of Schedule B, subject to the
conditions and exceptions, if any, set out in the
corresponding entry in the third column thereof and no
dealer shall charge sales tax on the sale of goods which
are declared tax free from time to time under this
section.

Power to 10. The State Government, after giving by notification,

amend
not less than thirty days notice of its intention to do so,
Schedules.
may, by like notification, add to or delete from the
Schedules A, B, C or D any goods, or otherwise
amend these Schedules, and thereupon the Schedule
shall be deemed to have been amended accordingly.

Input tax 11. (1) The input tax credit which a purchasing registered
credit.
dealer (hereinafter in this section called the purchasing
dealer), is entitled to claim, shall be the amount of input
tax paid or payable by such purchasing dealer to the
selling registered dealer, on the turnover of purchases
made by him during the tax period and input tax credit
shall be calculated as provided in this section and
allowed subject to such conditions as may be prescribed.

(2) The purchasing dealer availing of the input tax credit

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shall maintain the tax invoices, the registers and the

books of accounts in the manner as may be prescribed.

(3) The input tax credit shall be allowed to the extent of

the amount of input tax paid by the purchasing dealer on
the purchases of taxable goods made by him in the
State, from a registered dealer holding a valid certificate
of registration, which are intended for the purposes of, ---
(a) sale or re-sale of goods by him in the State; or
(b) sale in the course of inter-State trade or
commerce; or
(c) sale in the course of export out of the territory of
India; or
(d) use as raw material or as capital goods in the
manufacturing or processing of taxable goods
for sale of the nature referred to in clauses (a),
(b) or (c); or
(e) use as containers or packing material of taxable
goods for sale of the nature referred to in
clauses (a), (b), (c) or (d):
Provided that if the goods so purchased are
used partially for the purposes specified in this sub-
section, the input tax credit shall be allowed
proportionate to the extent these are used for the
purposes specified in this sub-section:

Provided further that input tax credit on fuels

and lubricants, shall be allowed only to the extent by
which the amount of input tax paid in the State exceeds

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4 percent subject to the condition that such fuels and

lubricants are used in the manufacture of taxable goods
or captive generation of power.

(4) Notwithstanding anything contained in sub-section

(3), the input tax credit shall be allowed only to the
extent by which the amount of input tax paid in the State
exceeds 4 percent on purchase of goods--
(a) sent outside the State otherwise than by way of
sale in the course of inter-State trade or commerce
or in the course of export out of territory of India;
and
(b) used in manufacture or in packing of taxable
goods sent outside the State otherwise by way of
sale in the course of inter-State trade or
commerce or in the course of export out of
territory of India.

(5) The input tax credit shall not be claimed by the

purchasing dealer until the tax period in which he
receives from a registered dealer from whom he has
purchased the goods, a tax invoice in the prescribed form
(in original) evidencing the payment of amount of input
tax:
Provided that for good and sufficient reasons,
to be recorded in writing and in the prescribed manner,
the Commissioner or any person appointed under
section 3 may allow such credit subject to such
conditions and restrictions as may be prescribed.

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(6) The input tax credit on capital goods shall be limited

to plant and machinery directly connected with the
manufacturing or processing of the finished goods and
input tax credit as admissible under this section shall
commence from the date of commencement of
commercial production and shall be adjusted against tax
payable on turnover of sales over a period of three years:
Provided that in case of closure of business
before the period of three years, no further input tax
credit shall be allowed and input tax carried forward, if
any, shall be forfeited.

(7) No input tax credit shall be claimed by a purchasing

dealer and shall not be allowed to him for, ---
(a) tax collected on the purchase of goods used in
the manufacture or processing or packing of
goods declared tax free under section 9;
(b) purchases of goods made in the course of inter-
State trade or commerce or in the course of
import of goods into the territory of India or
import from outside the State, in respect of tax
paid in any other country or other State;
(c) purchase of goods made in the State from,--
(i) an un-registered dealer or a casual
dealer, or
(ii) a dealer whose certificate of registration
has been suspended, or
(iii) a registered dealer who has opted to pay

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lump-sum amount, in lieu of tax, by way

of composition under sub-section (2) of
section 16 or presumptive tax under
section 7;
(d) purchase of goods used as free samples or gift
or for personal consumption;
(e) goods purchased for the uses specified in sub-
section (3) but not sold because of theft, loss or
destruction for any reason including natural
calamity;
(f) purchase of capital goods other than those
specified in sub-section (6);
(g) stock of goods remaining unsold at the time of
closure of business and if a dealer has already
taken any input tax credit against purchase of
such stock of goods there shall be a reverse tax
credit on closure of such business;
(h) save as provided in sub-section (4), tax
collected on purchase of goods but subsequently
despatched to a place outside the State in any
manner otherwise than by way of sale in the
course of inter-State trade or commerce;
(i) save as provided in sub-section (4), tax
collected on the purchase of goods used as raw
material in the manufacture of goods, and the
goods so manufactured are despatched outside
the State in any manner otherwise than by way
of sale in the course of inter-State trade or

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commerce;
(j) purchase of goods for sale under the transfer of
right to use goods for any purpose (whether for
specified period or not);

(k) purchases where,--

(i) tax invoice is not available with the
registered dealer; or
(ii) there is evidence that the tax invoice has
not been issued by the selling dealer from
whom the goods have been or stated to
have been purchased; or
(iii) original tax invoice does not contain the
details of tax charged separately by the
selling dealer from whom purchasing
dealer has purchased the goods.

(8) Notwithstanding anything contained in this Act, the

State Government may, as may be prescribed, specify
any goods in respect of which input tax credit shall not
be allowed in part or in full or specify the class of dealers
who shall not be entitled to input tax credit in part or in
full.

(9) If the goods purchased are intended for the purposes

specified in sub-section (3) and are subsequently used
fully or partly for purposes other than those specified in
the said sub-section, the input tax credit, if availed of,
shall be reduced from the input tax credit being claimed

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for the tax period during which such use has taken
place; and such reduction, shall be done in the manner
as may be prescribed.

(10) Subject to the provisions of this section, input tax

credit already availed of shall stand reversed if, --
(a) the dealer discontinues business; or
(b) the certificate of registration granted to the
dealer is cancelled; or
(c) the goods fall under clause (d), (e) or (g) of
sub-section (7); or
(d) excess input tax credit has been claimed; or
(e) the goods purchased are returned to the
selling dealer within three months of the date of
purchase of such goods; or
(f) the credit note has been received from selling
registered dealer for the amount of tax charged
in excess of the tax due according to the
provisions of this Act; or
(g) there exist any other circumstances as may be
prescribed.

(11) The dealer shall be liable to pay such amount of

reverse input-tax credit alongwith interest under section
19 from the date immediately succeeding the last date
prescribed for filing the return for the period for which
such input-tax credit was claimed till the date of its
payment.

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(12) Where any purchasing dealer has been issued with

a credit note or debit note or if he returns or rejects
goods purchased, as a consequence of which the input
tax credit availed of by him during any tax period (to
which the purchase of goods relates) becomes either
short or excess, he shall compensate such short or
excess by adjusting the amount of input tax credit
allowed to him in respect of the tax period in which the
credit note or debit note has been issued or the goods
are returned or rejected, subject to such conditions as
may be prescribed.

(13) The amount of net input tax credit, which may be

availed of by a purchasing dealer, shall be determined
on the basis of the following formula, namely: -
Net Input Tax Credit = A+B-C
Explanation--- In this formula----
(i) A represents the amount of input tax credit
for which the purchasing dealer is entitled to;
(ii) B represents outstanding input tax credit
brought forward from the previous tax period;
and
(iii) C represents reverse input tax credit as
determined under sub-section (10).

(14) The methods that are used by a purchasing dealer

in a year to determine the extent to which the goods are
sold, used, consumed or supplied, or intended to be
sold, used, consumed or supplied in the course of

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making taxable sales shall be fair and reasonable:

Provided that the Commissioner or any
person appointed under section 3 may, after giving the
dealer an opportunity of being heard and for the
reasons to be recorded in writing, reject the method
adopted by the purchasing dealer and calculate the
amount of input tax credit.

(15) Where a registered dealer without entering into a

transaction of sale, issues to another registered dealer a
tax invoice, retail invoice, bill or cash memorandum with
the intention to defraud the State Government revenue
or with the intention that the State Government may be
defrauded of its revenue, the Commissioner or any
person appointed under section 3 may, after making
such inquiry as he thinks fit and giving a reasonable
opportunity of being heard, deny the benefit of input tax
credit to such registered dealer issuing or accepting
such tax invoice, retail invoice, bill or cash
memorandum or other invoice either prospectively or
retrospectively from such date as he may fix.

Net tax 12. (1) The net tax payable by a registered dealer for a
payable.
tax period shall be the difference between the output tax
plus purchase tax, if any, and the input tax credit,
which can be determined from the following formula,
namely:--
Net tax payable = (O+P) I
Explanation. In this formula---

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(i) O denotes the output tax payable for any tax

period;
(ii) P denotes the purchase tax paid by a
registered dealer for any tax period; and
(iii) I denotes the input tax paid or payable for the
said tax period, including input tax credit, if
any, carried forward from any preceding tax
period as determined under section 11.

(2) If the amount of input tax credit is more than the

amount of output tax, the same may be adjusted, at the
74 of 1956 option of the dealer, against the tax liability for the said
tax period, if any, under the Central Sales Tax Act, 1956
and only the remaining amount of the Central Sales Tax
shall be payable.

(3) Excess amount of input tax credit, if any, after

adjustment under sub-section (2) shall be adjusted
against any outstanding tax, penalty or interest under
this Act or, at the option of the dealer, under the Central
74 of 1956
Sales Tax Act, 1956.

(4) Excess amount of input tax credit, if any, after

adjustment under sub-sections (2) and (3) may be
carried forward to subsequent tax period or at the option
of the dealer, on application being made in the
prescribed manner, be refunded in accordance with the
provisions of this Act.

(5) The net tax payable for a tax period by a dealer,

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liable to pay tax, but not registered under this Act, shall
be equal to the output tax plus purchase tax, if any,
payable for the said tax period as per the provisions of
this Act and no input tax credit shall be admissible to
him.

Burden of 13. In respect of any sale or purchase effected by a

proof.
dealer the burden of proving that he is not liable to pay
tax under section 6 or section 8 or that he is eligible to
input tax credit under section 11 shall be on him.

CHAPTER-IV
REGISTRATION, RETURNS, ASSESSMENT, RECOVERY AND
REFUND OF TAX.

Registration of 14. (1) No dealer shall, while being liable to pay tax
dealers.
under this Act, carry on business as a dealer unless he
has been registered and possesses a registration
certificate:

Provided that in the case of a casual dealer,

on payment of a fee of Rs.50/-, the Assessing Authority
or the Officer-Incharge of the check-post or barrier or
any other officer inspecting the goods at any other
place, may dispense with the requirement of a valid
certificate of registration under this section.

(2) Any person intending to establish a business in

Himachal Pradesh for the purpose of manufacturing
goods for sale may, notwithstanding that he is not liable
to registration under sub-section (1), be granted a

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registration certificate subject to such conditions and in

the manner as may be prescribed, and such person
when granted a registration certificate shall, for so long
as such certificate is in force, be liable to pay tax under
the Act:

Provided that grant of such a certificate of

registration shall be subject to the conditions that if such
person fails to establish the business within the period
specified in the certificate or fails to comply with any of
the conditions specified therein, he shall be liable by
order of the Assessing Authority, to pay a penalty
equivalent to one-half of the amount of tax which would
have been payable by him in respect of all the goods
purchased by him as if he had not been registered
under this sub-section:

Provided further that a dealer who sells

taxable goods, not liable to register under sub-section
(1) but who desires to register voluntarily may make an
application to the appropriate Assessing Authority in
the manner as may be prescribed and shall pay tax
only in accordance with section 4 from the date his
gross turnover exceeds a taxable quantum as
specified in sub-section (6) of section 4.

(3) Every dealer required by sub-section (1) to be

registered and every person who may be granted a
registration certificate under sub-section (2) shall make

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an application in this behalf in the prescribed manner, to

the Assessing Authority.

(4) If the Assessing Authority is satisfied that an

application for registration made under sub-section (3) is
in order, he shall, in accordance with such rules and on
payment of such fee and subject to such conditions as
may be prescribed, register the applicant and grant him
a certificate of registration in the prescribed form.

(5) When any dealer fails to apply for registration in

contravention of sub-section (1), the Assessing
Authority shall register such dealer and grant him a
certificate of registration and such registration shall take
effect as if it had been made under sub-section (4) on
the dealers application.

(6) The Assessing Authority may, by order, ----

(a) amend certificate of registration on the

dealers application if the dealer or his legal
representative furnishes the information that
he--
(i) has transferred his business, or
(ii) has changed the name (constitution)
or nature of his business, or
(iii) wants to open a new place of business
or make any change either in the
places of business or in the class or
classes of goods specified in his

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certificate of registration for resale or

for use in manufacture of goods for
sale;
(b) suspend a certificate of registration, without
prejudice to any other penalty, if the dealer
or person has violated any provision of this
Act or rules made thereunder;

(c) cancel a certificate of registration, on dealers

or, as the case may be, of his legal
representatives application or suo-moto,
without affecting liability to pay tax till such
cancellation,-
(i) if the dealer sells or otherwise disposes
of his business or any place of
business or discontinues his business,
or

(iii) if the dealer dies, or

(iii) for any other sufficient cause including

misuse of the certificate of registration
or cessation of liability to payment of
tax under this Act:

Provided that no order affecting any person

adversely shall be made under clauses (b) and (c) of
this sub-section without affording him a reasonable
opportunity of being heard; and
(d) renew a certificate of registration for such

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period and in the manner and on payment of

such fee as may be prescribed.

Security from 15. (1) The Commissioner or any other person appointed
certain class
to assist him under sub-section (1) of section 3, if it
of dealers.
appears to him to be necessary so to do for the proper
realisation of the tax levied under this Act, may, for
reasons to be recorded in writing, impose as a condition
of the issue of a certificate of registration to a dealer, or
of the continuance in effect of such certificate issued to
any dealer, a requirement that the dealer shall give
security, in the manner as may be prescribed, for such
amount as may be specified in the order.

(2) No dealer shall be required to furnish security under

sub-section (1), unless he has been given an
opportunity of being heard.

(3) Where the security furnished by a dealer under sub-

section (1) is in the form of a surety bond and the surety
becomes insolvent or is otherwise incapacitated or dies
or withdraws, the dealer shall, within fifteen days of the
occurrence of any of the aforesaid events, inform the
Authority granting the certificate of registration and shall
within thirty days of such occurrence furnish a fresh
surety bond.

(4) The Authority granting the certificate of registration

may, by an order in writing, for good and sufficient
cause, forfeit the whole or any part of the security

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furnished by a dealer for realising any amount of tax,

penalty or interest payable by a dealer:

Provided that no order shall be passed under

this sub-section without giving the dealer and the surety
a reasonable opportunity of being heard.

(5) The Authority granting a certificate of registration

may, on application by the dealer, order the refund of
security furnished by him or any part thereof, if the same
is not required for the purposes of this Act.

Payment of tax 16. (1) Tax payable under the Act shall be paid in the
and returns.
manner hereinafter provided at such intervals as may be
prescribed.

(2) The State Government may, in public interest and

subject to such conditions as it may deem fit, accept from
any class of dealers in lieu of the amount of tax payable
under this Act for any period, by way of composition, a
lumpsum to be determined and to be paid at such
intervals and in such manner as may be prescribed, or
the lumpsum amount may be calculated at a fixed rate
on the taxable turnover, as may be prescribed in respect
of such class of dealers and for this purpose a simplified
system of registration, maintenance of accounts, filing of
returns may also be prescribed which shall remain in force
during the period of such composition.

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(3) Such dealers as may be required so to do by the

Assessing Authority by notice served in the prescribed
manner and every registered dealer shall furnish such
returns by such dates and to such Authority as may be
prescribed.

(4) Before a registered dealer furnishes the return required

by sub-section (3), he shall, in the prescribed manner, pay
into a Government Treasury or the Scheduled Bank which
is a treasury bank, or at the office of the Assistant Excise
and Taxation Commissioner or Excise and Taxation
Officer-in-charge of the District, the full amount of tax due
from him under the Act according to such returns and shall
furnish along with the returns a receipt from such treasury,
bank or office of the Assistant Excise and Taxation
Commissioner or Excise and Taxation Officer-in-charge of
the District showing the payment of such amount:

Provided that no payment of such amount shall

be accepted at the office of the Assistant Excise and
Taxation Commissioner or Excise and Taxation Officer-in-
Charge of the District save through a crossed cheque or
bank draft payable at a local branch of a Scheduled Bank
in favour of the Assessing Authority:

Provided further that when a dealer makes

payment through a Scheduled Bank other than the
treasury bank, he shall obtain from such bank a certificate,
as may be prescribed, to the effect that the bank has

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remitted the amount of tax to the treasury bank on the

dealers directions and on production of such certificate to
the Assessing Authority the dealer shall be deemed to
have paid the tax on the date following the date on which
such certificate is issued by such bank:

Provided further that in case of payment

through a Scheduled Bank which is located at a station
other than that of the treasury bank, the dealer shall need
to procure the prescribed certificate from the concerned
bank, as mentioned under the preceding proviso, at least
three days before the expiry of the due date prescribed
under sub-section (2) for filing the return and only in that
case the dealer shall be deemed to have made the
payment by due date:

Provided further that where the payment is

made through a crossed cheque, such crossed cheque
must be delivered in the office of the Assessing Authority
concerned, not less than ten clear days before the expiry
of the due date prescribed under sub-section (3) for filing
the return, and the dealer shall be deemed to have made
the payment on the date on which such crossed cheque,
after its presentation in the bank, is actually credited into
the Government account and necessary receipt is issued
by the bank in favour of the dealer:

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Provided further that where the payment is

made through a crossed cheque and the cheque is
dishonoured, the dealer shall be deemed to have not made
the payment and shall be liable to any action which may be
taken for not making payment under this Act or the rules
framed there under.

Explanation. For the purposes of this sub-section

Scheduled Bank means a bank included in the Second
2 of 1934. Schedule to the Reserve Bank of India Act, 1934.

(5) If any dealer discovers any omission or other error in

any return furnished by him, he may, at any time, before
the date prescribed for the furnishing of the next return by
him, furnish a revised return, and if the revised return
shows a greater amount of tax to be due than was shown
in the original return, it shall be accompanied by a receipt
showing payment, as may be prescribed, in sub-section
(4), of extra amount.

(6) If a dealer fails without sufficient cause to furnish the

returns by the prescribed date as required under sub-
section (3), the dealer shall be liable to pay, by way of
penalty, a sum equal to Rs.25/- per day for delay in
furnishing such return upto 10 days, whereafter the penalty
shall be Rs.50/- per day till the default continues, but such
penalty shall not exceed Rs.3000/- provided that where no
tax is payable, such penalty shall not exceed Rs.500/-for
every return.

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(7) If a dealer fails without sufficient cause to comply with

the requirements of the provisions of sub-section (4), the
Commissioner or any person appointed to assist him under
sub-section (1) of section 3 may, after giving such dealer a
reasonable opportunity of being heard, direct him to pay by
way of penalty, a sum which shall not be less than ten
percentum, but which shall not exceed one-and-a-half
times of the amount of tax to which he is assessed or is
liable to be assessed under section 21 in addition to the
amount of tax to which he is assessed or is liable to be
assessed.

(8) If a dealer has maintained false or incorrect accounts

with a view to suppressing his sales, purchases or stocks
of goods, or has concealed any particulars of his sales or
purchases or has furnished to, or produced before, any
Authority under this Act or the rules made thereunder any
account, return or information which is false or incorrect in
any material particular, the Commissioner or any person
appointed to assist him under sub-section (1) of section 3
may, after affording such dealer a reasonable opportunity
of being heard, direct him to pay by way of penalty in
addition to the tax to which he is assessed or is liable to
be assessed, an amount which shall not be less than
twenty-five percentum, but which shall not exceed one
and a half times of the amount of tax to which he is
assessed.

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Tax deduction 17. (1) Notwithstanding anything contrary contained in

from the bills
section 20, every person making any payment or
or invoices of
the works discharge or any liability on account of valuable
contractors
consideration payable
etc.
(a) for the transfer of property in goods,
whether as goods or in some other form,
involved in the execution of works
contract, and

(b) for the transfer of property in goods on

account of sales of such goods made to
the Government of India or to any State
Government,
shall deduct an amount not exceeding four percentum,
as may be prescribed, purporting to be a part or full of
the tax payable on such sales, from the bills or invoices
raised by the works contractor or by the dealer selling
such goods, as payable by the person:
Provided that no deduction of such amount
shall be made in respect of any transfer of property in
goods, the turnover of which is deductible, from the
dealers gross turnover, under sub-section (3) of section
6:
Provided further that no such payment or
discharge of any bill raised by the works contractor of the
dealer selling such goods shall be made without
deductions:
Provided further that if the State Government
is satisfied that it is necessary to do so in the interest of

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the State revenue, it may notify the names/posts of such

persons who shall be competent persons to make such
deduction.

(2) The deduction referred to in sub-section (1) shall be

made in the manner, as may be prescribed, and the
payment of such deduction into the Government treasury
shall be the responsibility of the person making such
deduction.

(3) The person making such deduction shall issue

deduction certificate in the prescribed manner to the
person or dealer from whose bill or invoice, such
deduction has been made.

(4) If any person contravenes any or all of the provisions of

sub-section (1) or (2) or (3), the prescribed Authority shall,
after giving an opportunity of being heard, by an order, in
writing, direct that such person shall pay by way of
penalty, a sum not exceeding twice the amount of tax
deductible under sub-section (1).

(5) The provisions of sections 25 and 27 for recovery of

any amount of tax due from a dealer shall mutatis
mutandis apply for recovery of any amount of tax,
deducted and / or any penalty imposed but not deposited
under this section.

Declaration 18. Every dealer claiming, -

and (i) any deduction from his gross turnover, or
certificates to

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be filed (ii) any part of his taxable turnover to be a sale

alongwith
to Government, or
returns.
(iii) any part of the taxable turnover to be liable
to tax at concessional rate of tax under
this Act,
shall, alongwith the return under sub-section (3) of section
16, furnish to the Assessing Authority, the declaration or
the certificate as required under this Act.

Payment of 19. (1) If any dealer fails to pay the amount of tax due
interest.
from him under this Act except to the extent mentioned in
sub-section (2), he shall, in addition to the amount of tax,
be liable to pay simple interest on the amount of tax due
and payable by him at the rate of one percentum per
month, from the date immediately following the last date on
which the dealer should have either filed the return or paid
the tax under this Act, for a period of one month and
thereafter at the rate of one and a half per centum per
month till the default continues.

(2) If the amount of tax or penalty due from a dealer is not

paid by him within the period specified in the notice of
demand or, if no period is specified within thirty days from
the service of such notice, the dealer shall, in addition to
the amount of tax or penalty, be liable to pay simple
interest on such amount at the rate of one percentum per
month from the date immediately following the date on
which the period specified in the notice or the period of
thirty days, as the case any be, expires, for a period of one

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month and thereafter at the rate of one and a half

percentum per month till the default continues:

Provided that where the recovery of any tax or

penalty is stayed by an order of any court, the amount of
tax or penalty shall, after the order of stay is vacated, be
recoverable alongwith interest at the aforesaid rate on the
amount ultimately found to be due and such interest shall
be payable from the date the tax or penalty first became
due.

(3) The amount of interest payable under this section shall-

(i) for the purposes of collection and recovery, be
deemed to be tax under this Act; and
(ii) be in addition to the penalty, if any, imposed
under this Act.

Prohibition 20. (1) No person shall collect any sum by way of tax in
against
respect of sale or purchase of any goods on which no tax
collection of
tax in certain is payable under this Act.
cases.
(2) No person, who is not a registered dealer and liable
to pay tax in respect of any sale or purchase, shall collect
on the sale or purchase of any goods any sum by way of
tax from any other person and no registered dealer shall
collect any amount by way of tax in excess of the amount
of tax payable by him under this Act.

(3) If any person, or a dealer referred to in sub-section (1)

and (2) contravenes any of these provisions he shall be

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liable to pay, in addition to any tax for which he may be

liable, a penalty of an amount not exceeding five hundred
rupees, or double the amount so collected, whichever is
greater.

(4) If the Commissioner, or any person appointed to assist

him under sub-section (1) of section 3, in the course of any
proceedings under this Act or otherwise, has reason to
believe that any person has become liable to pay penalty
under sub-section (3), he shall serve on such person a
notice in the prescribed form requiring him to show cause
why a penalty as provided in sub-section (3) should not be
imposed on him and there upon hold an enquiry and shall
make such order as he thinks fit.

Assessment 21. (1) The returns furnished by a dealer shall be duly

of tax.
acknowledged in the manner prescribed and where all the
returns relating to any year have been filed and are correct
and complete in material particulars, the dealer shall,
subject to the provisions of sub-section (2), be deemed to
have been assessed for that year:

Provided that where the returns are not

complete in material particulars, the dealer shall be given
an opportunity to complete the same within fifteen days of
service of the notice.
Explanation.-- For the purpose of sub-section (1) a return
shall be deemed to be---

(i) correct, if its version conforms to that of the accounts

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maintained by the dealer and the account version

cannot be impeached by any adverse information
available on record till 31st October of the following
year; and
(ii) complete, in material particulars, if it contains the entire
information required to be furnished therein, is correct
arithmetically and is accompanied by the statutory or
prescribed lists, documents and proof of payment of
the full amount of tax due according to the returns and
is duly signed by the dealer.

(2) The State Government may prescribe the manner of

selection of cases for scrutiny of returns filed by the
dealers specified in sub-section (1) and the Assessing
Authority shall, in respect of each selected case, serve on
the dealer a notice in the prescribed manner requiring him,
on a date and at a place specified therein, either to attend
in person or to produce or cause to be produced any
evidence on which such dealer may rely in support of the
returns filed by him under sub-section (1) and after
hearing the dealer and considering the evidence produced
by him assess the amount of tax, if any, due from him.

(3) Notwithstanding anything contained in this Act, if the

Government considers it necessary and expedient, in
public interest so to do, it may in respect of a dealer,
whose gross turnover in a year does not exceed such
amount as the Government may specify, in a special
scheme of self-assessment for any year which may be

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notified, under this Act:

Provided that in case any dealer, whose

taxable turnover has been assessed under the self-
assessment scheme, is found to have evaded the tax, the
Assessing Authority shall, after affording such dealer a
reasonable opportunity of being heard, direct him to pay by
way of penalty, in addition to the amount of tax assessed,
a sum which shall not be less than one hundred per
centum but which shall not exceed one and a half times of
the amount of tax found to have been evaded and
assessed.

(4) The Assessing Authority shall serve on the dealer not

covered under sub-section (1) a notice in the prescribed
manner requiring him, on a date and at a place specified
therein, either to attend in person or to produce or cause
to be produced any evidence on which such dealer may
rely in support of such returns and after hearing such
evidence as the dealer may produce, and such other
evidence as the Assessing Authority may require on
specified points, assess the amount of tax due from the
dealer.

(5) If a dealer, having furnished returns in respect of a

period, fails to comply with the terms of a notice issued
under sub-section (2) or (4), the Assessing Authority shall,
within five years after the expiry of such period, proceed to
assess to the best of his judgment the amount of the tax

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due from the dealer.

(6) If a dealer does not furnish returns in respect of any

period by the prescribed date, the Assessing Authority
shall, within five years after the expiry of such period, after
giving the dealer a reasonable opportunity of being heard,
proceed to assess, to the best of his judgment, the amount
of tax, if any, due from the dealer.

(7) If upon information which has come into his

possession, the Assessing Authority is satisfied that any
dealer has been liable to pay tax under this Act in respect
of any period but has failed to apply for registration, the
Assessing Authority shall, within five years after the expiry
of such period, after giving the dealer a reasonable
opportunity of being heard, proceed to assess, to the best
of his judgment, the amount of tax, if any, due from the
dealer in respect of such period and all subsequent period
and in cases where such dealer has wilfully failed to apply
for registration, the Assessing Authority may direct that
the dealer shall pay by way of penalty, in addition to the
amount so assessed, a sum which shall not be less than
fifteen percentum, but which shall not exceed one and a
half times that amount.

(8) The amount of any tax, penalty or interest payable

under this Act shall be paid by the dealer by such date as
may be specified in the notice issued by the Assessing
Authority for the purpose and the date so specified shall

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not be less than fifteen days and not more than thirty days
from the date of service of such notice:

Provided that the Assessing Authority may,

with the prior approval of the Assistant Excise and
Taxation Commissioner or the Excise and Taxation Officer
in-charge of the district, extend the date of such payment,
but not more than 90 days, or allow payment by monthly
instalments not exceeding three, against an adequate
security or a bank guarantee.

(9) If the tax assessed under this Act or any instalment

thereof is not paid by any dealer within the time specified
therefore in the notice of assessment or in the order
permitting payment in instalments, the Commissioner, or
any person appointed to assist him under sub- section (1)
of section 3, may after giving such dealer an opportunity
of being heard, impose on him a penalty not exceeding
the sum due from him.

(10) Any assessment made under this section shall be

without prejudice to any penalty imposed under this Act.

Assessment 22. (1) A casual dealer who is registered under this Act,
of a casual
shall be assessed like any other registered dealer under
dealer.
section 21.

(2) A casual dealer who is not registered shall,

immediately on completion of transaction of sale or
purchase for which he is liable to pay tax, report to the

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Assessing Authority having jurisdiction with reference to

the place of such transaction or to the Officer-incharge of
the nearest check-post or barrier, the amount of sale or
purchase price and the tax payable thereon and shall
deposit the amount of tax with such Assessing Authority
or such Incharge of the check-post or barrier within such
time and in such manner as such Authority or Incharge
may direct:

Provided that if a casual dealer desires

voluntarily to pay the tax in advance in respect of the
goods which such dealer intends to sell or purchase, he
may pay the amount of tax on the sale or purchase value
of such goods enhanced by ten percentum to the
Assessing Authority or the Officer-Incharge of the nearest
check-post or barrier.

(3) Where a casual dealer fails to make a report as

required in sub-section (2), the Assessing Authority
having jurisdiction or Excise and Taxation officer Incharge
of the nearest check-post or barrier may require such
casual dealer to make a report of the sale or purchase
price and the tax due, failing which such Assessing
Authority or such Incharge of the check-post or barrier
may assess to the best of his judgement the amount of
tax due and direct the casual dealer to pay the amount of
tax within such time and in such manner as he may
direct.

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(4) Where a casual dealer fails to pay the tax as directed

by the Assessing Authority or the Excise and Taxation
Officer, Incharge of the check-post or barrier under sub-
section (2) or (3), the goods belonging to such casual
dealer shall be detained until the tax is paid or adequate
security for payment of tax is furnished.

Re-assessment 23. (1) If in consequence of definite information which has

of tax.
come into his possession, the Assessing Authority
discovers that the turnover of the business of a dealer has
been under-assessed or escaped assessment in any year,
the Assessing Authority may, at any time within three
years from the date of assessment under section 21,
proceed to re-assess the tax payable on the turnover
which has been under-assessed or has escaped
assessment:

Provided that the Assessing Authority may also

take action to impose the penalty and interest under this
Act:
Provided further that no order of re-assessment
or imposition of penalty and interest shall be made unless
the dealer is afforded a reasonable opportunity of being
heard in the prescribed manner.

(2) The Assessing Authority or any such Authority as may

be prescribed may, at any time, within one year from the
date of any order passed by him and subject to such
conditions as may be prescribed, rectify any clerical or

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arithmetical mistake apparent from the record.

Period of 24. (1) Notwithstanding the provisions relating to the

limitation for
period of limitation contained in section 21 or section 23 or
completion
of assessment in any other provision of this Act, assessment or re-
or
assessment may be made at any time in consequence of,
re-assessment
not to apply in or to give effect to, any order made by any court or other
certain cases.
Authority under this Act.

(2) Where the assessment proceedings relating to any

dealer remained stayed under the orders of any court or
other Authority for any period, such period shall be
excluded in computing the period of limitation for
assessment or re-assessment specified in section 21 or
section 23 or in any other provision of this Act.

Tax and 25. The amount of any tax and penalty imposed or interest
penalty
payable under this Act, which remains unpaid after the
recoverable as
arrears of land due date, shall be recoverable as arrears of land revenue.
revenue.

Tax, penalty 26. Notwithstanding anything to the contrary contained in

and interest to
any law, any amount of tax and penalty including interest,
be first charge
on property. if any, payable by a dealer or any other person under this
Act shall be a first charge on the property of the dealer or
such other person.

Special mode 27. (1) Notwithstanding anything contained in section 25 or

of recovery.
any law or contract to the contrary, Commissioner, or any
officer other than an Excise and Taxation Inspector,
appointed under section 3 to assist the Commissioner,

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may, at any time or from time to time, by notice in writing

(a copy of which shall be sent to the dealer at his last
address known to the officer issuing the notice), require

(a) any person from whom any amount is due or

may become due to a dealer who has failed
to comply with a notice of demand for any
amount due under this Act;
(b) any person who holds or may subsequently
hold any money for or on account of such
dealer,
to pay into the Government treasury in the manner
specified in the notice issued under this sub-section, so
much of the money as is sufficient to pay the amount due
from the dealer in respect of the arrears of the tax, interest
and penalty under this Act.
Explanation.-- For the purposes of this sub-section, the
amount due to a dealer or money held for or on account of
a dealer by any person shall be computed after taking into
account such claim, if any, as may have fallen due for
payment by such dealer to such person and as may be
lawfully subsisting.

(2) The officer issuing a notice under sub-section (1) may

at any time, or from time to time, amend or revoke any
such notice or extend the time for making any payment in
pursuance of the notice.

(3) Any person making any payment in compliance with a

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notice issued under sub-section (1) shall be deemed to

have made the payment under the Authority of the dealer
and the treasury receipt for such payment shall constitute
a good and sufficient discharge of the liability of such
person to the extent of the amount specified in the receipt.

(4) Any person discharging any liability to the dealer after

service on him of the notice issued under sub-section (1)
shall be personally liable to the State Government to the
extent of the liability discharged or to the extent of the
liability of the dealer for tax, interest and penalty,
whichever is less.

(5) Where a person on whom a notice is served under sub-

section (1), proves to the satisfaction of the officer who
issued the notice that the sum demanded or any part
thereof was not due to the dealer or that he did not hold
any money for or on account of the dealer, at the time the
notice was served on him, then nothing contained in this
section shall be deemed to require such person to pay into
the Government treasury any such money or part thereof,
as the case may be.

(6) Any amount of money which a person is required to

pay under sub-section (1), or for which he is personally
liable to the State Government under sub-section (4) shall,
if it remains un-paid, be recoverable as an arrear of land
revenue.

(7) The provisions of this section shall be without prejudice

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to any action that may be taken for the recovery of the

arrears of tax, interest and penalty, if any, due from the
dealer.

Refund. 28. (1) The Assessing Authority either suo-moto or on an

application shall, in the prescribed manner, refund to a
registered dealer or any other person any amount of tax,
interest or penalty paid by such dealer or any such other
person under this Act, if the amount of tax, penalty or
interest so paid is in excess of the amount due from him
under this Act, either by a refund voucher or, at the option
of the dealer or such other person, by adjustment of the
amount so paid with the amount due from him, in respect
of any other period:

Provided that no application for refund of any

excess amount of input tax credit under sub-section (4) of
section 12 shall be made and no refund allowed until the
expiry of two years from the date of the commencement
of this Act, and thereafter the claim may be made at
the end of each subsequent year:
Provided further that no refund under this
section shall be allowed unless the claim for refund is
made within a period of three years from the date on which
such claim accrues.

(2) Where any amount required to be refunded by the

Assessing Authority to any person by virtue of an order
sanctioning such refund issued under this Act is not

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refunded to him within ninety days of the date of the order,

the dealer shall be entitled to get simple interest on such
amount at the rate of one percentum per month from the
date immediately following the date of expiry of the said
period for a period of one month and thereafter at the rate
of one and a half percentum per month till the refund is
made.

(3) Notwithstanding anything contained in sub-section (1)

or (2), the Assessing Authority shall first adjust the amount
to be refunded towards the recovery of any amount due
from the dealer on the date of such adjustment, and shall
thereafter refund the balance, if any.

(4) If the delay in allowing refund within the aforesaid

period of ninety days is for reasons beyond the control of
the Assessing Authority or attributable to the dealer,
whether wholly or in part, the period of such delay shall be
excluded from the period for which interest is payable.

(5) If any question arises whether any period is to be

excluded for the purposes of calculation of interest under
sub-section (4), the same shall be referred to the
Commissioner, or such other officer as the State
Government may, by notification, appoint, whose decision
shall be final.

(6) Where an order allowing refund is the subject-matter of

any appeal or further proceedings or where any other
proceedings under this Act are pending, and the Assessing

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Authority is of the opinion that the refund is likely to

adversely affect the recovery, the Assessing Authority may
withhold the refund and refer the case to the
Commissioner whose orders shall be final.

(7) The period during which the refund remains withheld

under sub-section (6) shall be excluded for the purpose of
calculation of interest under this section.

CHAPTERV
ACCOUNTS, SURVEY AND INSPECTION

Accounts. 29. (1) Every registered dealer or a dealer on whom a

notice has been served to furnish returns under sub-
section (3) of section 16 shall maintain a true and upto
date account of the value of goods purchased,
manufactured and sold by him, or goods held by him in
stock and in addition to the books of accounts that a dealer
maintains and keeps for the purpose referred to in this
sub-section, he shall maintain and keep such registers and
accounts in such form as may be prescribed.

(2) Every dealer referred to in sub-section (1) shall retain at

his place of business all accounts, registers and
documents.

(3) Where a dealer as referred to in sub-section (1) has

established branch offices of the business in the State
other than the principal place of business, the relevant
accounts, registers and documents in respect of each such
branch shall, without prejudice to the provisions of sub-

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section (5), be maintained and retained by him at such

branch also.

(4) If the Assessing Authority is of the opinion that the

accounts maintained by any dealer or class of dealers do
not sufficiently enable him to verify the returns or to
properly make assessment on the basis thereof, he may,
by an order, require such dealer or class of dealers to
maintain such accounts, in such manner as may be
prescribed.

(5) The State Government may, by notification, in public

interest, exempt any class of registered dealers from the
operation of the provisions of this section.

Tax invoice, 30. (1) The tax invoice shall contain such particulars as are
retail invoice
specified in this section and shall be issued by one
etc.
registered dealer to another dealer (whether registered or
not) on the basis of which the purchasing registered dealer
shall be entitled to claim input tax credit.

(2) Every registered dealer making a taxable sale to

another dealer (whether registered or not) shall issue to
such purchasing dealer a tax invoice, at the time of sale,
containing such particulars as specified in sub-section (5),
and retain a copy thereof.

(3) The tax invoice shall not be issued by the registered

dealer when the sale is
(a) by a registered dealer paying presumptive tax

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under section 7 or lumpsum under sub-section

(2) of section 16 of this Act; or
(b) of goods declared tax free under section 9 of
this Act; or
(c) in the course of inter-State trade and commerce;
or
(d) the sale is in the course of export out of the
territory of India;

(4) For every taxable sale only one invoice shall be issued.

(5) The tax invoice issued under sub-section (2) shall

contain the following particulars, namely: -
(a) the words Tax Invoice in bold letters at the top or
at other prominent place;
(b) the name, address and number of certificate of
registration of the selling registered dealer;
(c) the name, address and number of certificate of
registration of the purchasing registered dealer;
(d) serial number and the date on which the tax
invoice is issued;
(e) description, quantity, volume and value of goods
sold, and amount of tax involved shown
separately;
(f) signatures of the selling dealer or his servant,
manager or agent, duly authorized by him; and
(g) the name and address of the printer.

(6) Except where tax invoice is required to be issued under

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sub-section (2), every registered dealer who sells any

goods exceeding two hundred rupees, in any one
transaction, to any person, he shall issue to the purchaser
a retail invoice containing the particulars specified in sub-
section (7), and retain a copy thereof.

(7) The retail invoice shall contain the following particulars,

namely: -
(a) the words Retail Invoice or Cash Memo-
random or Bill in bold letters at the top or at a
prominent place;
(b) the name, address and number of certificate of
registration of the selling registered dealer;
(c) in case the sale is in the course of inter-State
trade or commerce or export out of the territory of
India, the name, address and registration
number, if any, of the purchasing dealer/foreign
buyer and the type of statutory form, if any,
against which the sale has been made;
(d) serial number and the date on which the retail
invoice is issued;
(e) description, quantity, volume and value of goods
sold, amount of tax involved, if any ;
(f) signature of the selling dealer or his servant,
manager or agent, duly authorized by him; and
(g) the name and address of the printer.

(8) Every registered dealer shall intimate, in writing, to the

Assessing Authority, the total number of the tax invoices

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and the retail invoices got printed and kept for use by him
during each year.

(9) The tax invoice shall be issued in triplicate and the

original alongwith second copy shall be given to the
purchaser or the person taking delivery of the goods, as the
case may be, and the third copy shall be retained by the
selling dealer.

(10) The retail invoice shall be issued in duplicate and the

original copy shall be given to the purchaser and the
second copy shall be retained by the selling dealer.

(11) Where tax invoice or retail invoice are not required to

be issued, every registered dealer shall issue such other
invoice as may be prescribed.

(12) Every dealer shall preserve books of accounts

including tax invoices and retail invoices until the expiry of
five years after the end of the year to which they relate or
for such other period as may be prescribed or until the
assessment attains its finality whichever is later.

(13) Where any dealer is a party to any appeal or revision

under this Act or any other proceeding, he shall retain
every record and accounts which pertain to the subject
matter of such appeal, revision or other proceeding, until it
is finally disposed of.

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(14) Every dealer who maintains the records electronically

shall also maintain day to day print-out of all such records
and shall retain them for the period specified in sub-section
(12), or, as the case may be, in sub-section (13).

(15) The State Government may, by notification, in public

interest, exempt any class of the registered dealers from
the provisions contained in sub-sections (2) to (14).

(16) Where any dealer contravenes the provisions of sub-

sections (2) to (14), the Commissioner or any other
person appointed under section 3 may, after affording such
dealer a reasonable opportunity of being heard, impose
upon him a penalty which may extend to five thousand
rupees for every contravention.

Issue of credit 31. (1) Where a tax invoice has been issued for any sale of
notes and
goods but if within six months from the date of such sale,
debit notes.
the amount shown as tax charged in such tax invoice is
found to exceed the tax payable, the registered dealer
effecting the sale shall immediately issue to the purchasing
registered dealer a credit note containing such particulars
as may be prescribed.

(2) Where a tax invoice has been issued for sale of any
goods and the tax payable in respect of the sale exceeds
the amount shown as tax charged in such tax invoice, the
registered dealer making the sale, shall immediately issue
to the purchasing registered dealer a debit note containing
such particulars as may be prescribed.

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(3) Any registered dealer who receives or issues a credit

note or a debit note shall modify his return for the period in
which the credit note or debit note is received or issued,
as the case may be, and pay any tax due before
furnishing such return.

Production 32. (1) The Commissioner, or any person appointed to

and inspection
assist him under sub-section (1) of section 3 not below the
of books,
documents rank of Excise and Taxation Officer may, for the purposes
and accounts.
of this Act, require any dealer to produce before him any
book, document or account relating to his business and
may inspect, examine and copy the same and make such
enquiries from such dealer relating to his business as may
be necessary:

Provided that books, documents and accounts of

a period more than five years prior to the year in which
assessment is made shall not be so required.

(2) Every registered dealer shall-

(a) maintain day to day accounts of his
business;

(b) maintain a list of his account books, display

it alongwith his registration certificate and
furnish a copy of such list to the Assessing
Authority ;
(c) produce, if so required, account books of
his business before the Assessing
Authority for authentication in the

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prescribed manner;
(d) retain his account books at the place of his
business unless removed therefrom by an
official for inspection, by any official
agency, or by auditors, or for any other
reasons which may be considered to be
satisfactory by the Assessing Authority.

(3) If any officer referred to in sub-section (1) has

reasonable grounds for believing that any dealer is trying
to evade liability for tax or other dues under this Act, and
that anything necessary for the purpose of an investigation
into his liability may be found in any books, account,
register or document, he may seize such book, account,
register or document as may be necessary. The officer
seizing the book, account, register or document shall
forthwith grant a receipt for the same and shall, -

(a) in the case of book, account, register or

document which was being used at the
time of seizing, within a period of twenty-
one days from the date of seizure, and
(b) in any other case, within a period of
ninety days from the date of seizure,

return it to the dealer or the person from whose custody it

was seized after examination or after having such copies
or extracts taken therefrom as may be considered
necessary, provided the dealer or the aforesaid person

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gives a receipt in writing for the books, account, register or

document returned to him and the officer may, before
returning the books, account, register or document, affix
his signatures and his official seal at one or more places
thereon:

Provided that where the dealer fails to comply

with the directions of the officer seizing the books or any
other officer under this Act, such officer may further retain
such books for such period as he may think fit after
obtaining the permission of the Commissioner:

Provided further that such officer shall inform

the dealer the reasons for which the books are required to
be retained beyond the period prescribed under this sub-
section.

(4) For the purposes of sub-section (2) or sub-section (3),

an officer referred to in sub-section (1) may enter and
search any office, shop, godown, vessel, vehicle, or any
other place of business of the dealer or any building,
dwelling house, or place where such officer has reason to
believe that the dealer keeps or is, for the time being,
keeping any books, accounts, registers, documents or
goods relating to his business:
Provided that no entry or search in the
dwelling house shall be made-
(i) after the sunset and before the sunrise;
(ii) by an officer below the rank of an Excise

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and Taxation Officer; and

(iii) without obtaining the sanction of the
District Magistrate within whose
jurisdiction such house is situated.

(5) The powers conferred by sub-section (4) shall include

the power to open and search any box or receptacle in
which any books, accounts, registers or other relevant
documents of the dealer may be contained and to take
copies or extracts of the said accounts, registers or
documents and such inventory of the goods and cash
found as appears to him necessary for the purpose of this
Act.

(6) Any officer empowered to act under sub-section (3) or

sub-section (4) shall have power to seize any goods which
are found in any office, shop, godown, vessel, vehicle or
any other place of business or any building or place of the
dealer but not accounted for by the dealer in his books,
accounts, registers, records and other documents.

Power of 33. (1) Notwithstanding anything contained in any other

survey.
provision of this Act, any Assistant Excise and Taxation
Commissioner or Excise and Taxation Officer appointed to
assist the Commissioner under sub-section (1) of section 3
or an Excise and Taxation Inspector, duly authorized by
the Commissioner may, for the purpose of survey
regarding ascertainment of commencement of liability to
pay tax for registration under section 14 of this Act, and

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extent of business, enter-

(a) any place within the limits of the area

assigned to him, or
(b) any place occupied by any dealer in
respect of which he exercises
jurisdiction,
at which the dealer carrying on the business, keeps any of
his books of accounts or other documents or any part of
his cash relating to the sale or purchase of goods or stock
of goods relating to his business and require any dealer,
employee or any other person who may at that time and
place be attending in any manner to, or helping in carrying
on of such business-
(i) to afford him the necessary facility to
inspect such books of accounts or other
documents as he may require and
which may be available at such place,
(ii) to afford him the necessary facility to
check or verify the cash and stock of
goods which may be found therein, and
(iii) to furnish such information including such
statement as he may require as to any
matter which may be useful for, or
relevant to, any proceedings under this
Act.

(2) For the purpose of sub-section (1), no entry in the

dwelling house shall be made-

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(i) after sunset or before the sunrise;

(ii) by any officer below the rank of an

Excise and Taxation Officer; and

(iii) without obtaining the sanction of the

District Magistrate within whose
jurisdiction such house is situated.

Establishment 34. (1) If, with a view to preventing or checking evasion of

of check-posts
tax under this Act, the State Government considers it
or barriers and
inspection of necessary so to do, it may, by notification direct the
goods in
establishment of a check post or the erection of a barrier or
transit.
both at such place or places as may be notified.

(2) The owner or person in-charge of a goods carriage or

vessel shall carry with him a goods carriage record, a trip
sheet or a log book, as the case may be, and a tax invoice
or a bill of sale or a delivery note containing such
particulars as may be prescribed, in respect of such
goods, meant for the purpose of business, and produce
the same before an officer in-charge of a check post or
barrier or any other officer not below the rank of an Excise
and Taxation Inspector checking the vehicle or vessel at
any place.

(3) At every check post or barrier or at any other place

when so required by any officer referred to in sub-section
(2), the driver or any other person-in-charge of the [goods
carriage] or vessel, shall stop the vehicle or vessel, as the

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case may be, and keep it stationary as long as may

reasonably be necessary, and allow the officer-in-charge
of the check post or barrier or the aforesaid officer to
examine the contents in the vehicle or vessel and inspect
all records relating to the goods carried which are in the
possession of such driver or other person-in-charge, who
shall also furnish such other information as may be
required by the aforesaid officer, and if considered
necessary such officer may also search the [goods
carriage] or vessel and the driver or other person-in-charge
of the vehicle or vessel or of the goods.

(4) The owner or person-in-charge of a goods carriage or

vessel entering the limits of State or leaving the State limits
shall also give in triplicate a declaration (generated
electronically or otherwise) containing such particulars of
goods carried in such vehicle or vessel, as the case may
be, before the officer-in-charge of the check post or barrier
and shall produce the copy of the said declaration duly
verified and returned to him by the said officer or before
any other officer referred to in sub-section (2) at the time of
checking under this section:

Provided that where a goods carriage or vessel

bound for any place outside the State passes through the
State, the owner or person-in-charge of such vehicle or
vessel shall furnish, in duplicate, to the officer-in-charge of
the check post or barrier of his entry into the State a
declaration in the prescribed form and obtain from him a

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copy duly verified. The owner or person-in-charge of the

goods carriage or vessel, as the case may be, shall deliver
within seventy two hours the said copy to the officer-in-
charge of the check post or barrier at the point of its exit
from the State, failing which he shall be liable to pay a
penalty to be imposed by the officer-in-charge of the check
post or barrier of the entry not exceeding twenty-five
percentum of the value of the goods but which shall not be
less than fifteen percentum of the value of the goods:

Provided further that no penalty shall be

imposed unless the person concerned has been given a
reasonable opportunity of being heard.

(5) At every station of transport of goods, bus stand or any

other station or place of loading or unloading of goods,
other than a rail head or a Post Office, when so required
by the Commissioner, or any person appointed to assist
him under sub-section (1) of section 3, the driver or the
owner of goods carriage or the employee of a transport
company or goods booking agency shall produce for
examination transport receipt and all other documents and
account books concerning the goods carried, transported,
loaded, unloaded, consigned or received for transport
(maintained by him in the prescribed manner). The
Commissioner or the person so appointed shall, for the
purpose of examining that such transport receipts or other
documents or account books are in respect of the goods
carried, transported, loaded, unloaded, or consigned or

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received for transport, have the powers to break open any

package or packages of such goods.

(6) If the officer-in-charge of the check post or barrier or

other officer as mentioned in sub-section (2) has reasons
to suspect that the goods under transport are meant for
business and are not covered by proper and genuine
documents as mentioned in sub-section (2) or sub-section
(4), as the case may be, or that the person transporting the
goods is attempting to evade payment of tax due under
this Act, he may, for reasons to be recorded in writing and
after hearing the said person, but subject to pervious
approval of the Excise and Taxation Officer Incharge of
the barrier order the unloading or detention of the goods,
for such period as may reasonably be necessary and shall
allow the same to be transported only on the owner of
goods or his representative or the driver or other person
in-charge of the goods carriage or vessel on behalf of the
owner of the goods, furnishing to his satisfaction a security
or executing a bond with or without sureties for securing
the amount of tax, in the prescribed form and manner, for
an amount not exceeding twenty-five percentum of the
value of the goods but which shall not be less than fifteen
percentum of the value of the goods:

Provided that where any goods are detained a

report shall be made immediately and in any case within
twenty four hours of the detention of the goods by the
officer detaining the goods to the Assistant Excise and

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Taxation Commissioner incharge of the District or the

Excise and Taxation Officer incharge of the District or
barrier, as the case may be, seeking the latters permission
for the detention of the goods for a period exceeding
twenty-four hours, as and when so required and if no
intimation to the contrary is received from the latter the
former may assume that his proposal has been accepted.

(7) The officer detaining the goods shall record the

statement, if any, given by the owner of the goods or his
representative or the driver or other personin-charge of
the goods carriage or vessel and shall require him to
produce proper and genuine documents as referred to in
sub-section (2) or sub-section (4), as the case may be,
before him in his office on a specified date on which date
the officer shall submit the proceeding along with the
connected records to such officer as may be authorised in
that behalf by the State Government for conducting
necessary enquiry in the matter. The said officer shall,
before conducting the enquiry, serve a notice on the owner
of the goods and give him an opportunity of being heard
and if, after the enquiry, such officer finds that there has
been an attempt to evade the tax due under this Act, he
shall, by order, impose on the owner of the goods a
penalty not exceeding twentyfive percentum of the value
of the goods but which shall not be less than fifteen
percentum of the value of the goods, and in case he finds
otherwise, shall order the release of the goods.

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(8) If the owner of the goods or his representative or the

driver or other person-incharge of the goods carriage or
vessel does not furnish security or does not execute the
bond as required by sub-section (6) within ten days from
the date of detaining the goods or goods carriage or
vessel, the officer referred to in that sub-section may order
further detention of the goods and in the event of the
owner of the goods not paying the penalty imposed under
sub-section (7) within twenty days from the date of the
order imposing the penalty, the goods detained shall be
made liable to be sold by the officer, who imposed the
penalty, for the realisation of the penalty by public auction
as may be prescribed . If the goods detained are of a
perishable nature or subject to speedy or natural decay or
when the expenses of keeping them in custody are likely to
exceed their value the officer in-charge of the check post
or barrier or any other officer referred to in sub-section (2),
as the case may be, shall immediately sell such goods or
otherwise dispose them of. The sale proceeds shall be
deposited in the Government treasury and the owner of the
goods shall be entitled to only the balance amount of sale
proceeds after deducting the expenses and other
incidental charges incurred in detaining and disposing of
the goods.

(9) The officer detaining the goods shall issue to the owner
of the goods or his representative or the driver or the
person-in charge of the goods carriage or vessel receipt
specifying the description and quantity of the goods so

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detained and obtain an acknowledgement from such

person or if such person refuses to give an
acknowledgment, record the fact of refusal in the presence
of the two witnesses.

(10) If the order of detention of goods under sub-section

(6) or of imposition of penalty under sub-section (7) or sub-
section (8) is in the meantime set aside or modified in
appeal or other proceedings, the Officer detaining the
goods and imposing the penalty, as the case may be, shall
also pass consequential orders for giving effect to the
orders in such appeal or other proceedings as the case
may be.

(11) No dealer or any person, including a carrier of goods

or agent of a transport company or booking agency acting
on behalf of a dealer, shall take delivery of, or transport,
from any vessel, station, airport or any other place,
whether of similar nature or otherwise, any consignment of
goods other than personal luggage or goods for personal
consumption, the sale or purchase of which is taxable
under this Act, except in accordance with such conditions
as may be prescribed with a view to ensuring that there is
no evasion of the tax imposed by or under this Act:
Provided that no place which is a railhead or
postoffice shall be so notified by the State Government.

Explanation-- I.-In this section the expression goods

carriage has the same meaning as is assigned to it in

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Central Act clause (14) of section 2 of the Motor Vehicles Act, 1988.
No. 59 of 1988
Explanation-- II.- For the purposes of sub-section (2), the
goods meant for the purposes of personal consumption
shall not be construed as meant for the purposes of
business.

Explanation-- III.- For purposes of sub-section (7), service

of notice on the representative of the owner or the driver or
other personincharge of the goods carriage or vessel
shall be deemed to be a valid service on the owner of the
goods.

Registration 35. (1) For carrying out the purposes of section 34, every
and
carrier of goods, agent of transport company and booking
submission of
returns by agency having a place of business in the State of
carrier of
Himachal Pradesh and transporting or clearing or
goods and
agent of forwarding goods on behalf of a dealer, shall be required to
transport
obtain a certificate of registration, in the prescribed
companies.
manner, from the Assessing Authority of the area in which
it has a place of business, on payment of such fee as may
be prescribed and on furnishing of a security to the
satisfaction of the said Authority in the manner as may be
prescribed.

(2) Every agency, referred to in sub-section (1), shall

submit to the Assessing Authority such returns of the
goods transported, cleared or forwarded by it, by such
dates and in such manner as may be prescribed.

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(3) The Assessing Authority shall have the powers to call

for and examine the books of accounts, documents and
other record in possession of such agency with a view to
verifying the correctness of returns submitted and the
compliance to the requirements of provisions of section 34.

Assessee etc. 36. Any assessee, dealer or other person, who is entitled
permitted to
or required to attend before any Authority in connection
attend through
authorised with any proceedings under this Act, except when required
agent.
to attend in person, may attend through a person
authorised by him in writing in this behalf, in the prescribed
manner.

Power to call 37. The Commissioner or any other person appointed to

for information
assist him under sub-section (1) of section 3 may, for
from Banking
Companies carrying out the purposes of this Act, require any person
etc.
including a banking company, post office or any officer
thereof to furnish any information or statement useful for,
or relevant to, any proceedings under this Act.

Delegation of 38. Subject to such restrictions and conditions as may be

powers.
prescribed, the Commissioner may, by order in writing,
delegate any of his powers under this Act to an officer not
below the rank of Additional Excise and Taxation
Commissioner posted at the State Headquarters.

Transfer of 39. Where the ownership of the business of a registered

business.
dealer is entirely or in part transferred and the transferee
carries on such business either in its old name or in some
other name, the transferee shall, for all the purposes of this

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Act (except for liabilities under this Act already discharged

by such dealer), be deemed to be and to have always
been registered as if the certificate of registration of such
dealer had initially been granted to the transferee; and the
transferee shall on application to the prescribed authority
be entitled to have the registration certificate amended
accordingly.

Liability on 40. Should his certificate of registration be cancelled under

stock in
any provision of this Act, a dealer, save when he has
certain cases.
transferred his business to some one else, and
notwithstanding clause (s) of section 2 but subject to the
provisions of section 9, shall be liable to pay tax on goods
purchased by him in the State of Himachal Pradesh after
registration, and remaining unsold at the time of
cancellation of certificate at a rate leviable on the sale of
such goods.

Liability to pay 41. (1) Where a dealer is an undivided Hindu family, firm or
tax of a
other association of persons, and such family, firm or
partitioned
Hindu family, association is partitioned, dissolved or disrupted, as the
dissolved firm
case may be, -
etc.
(a) the tax payable under this Act by such
family, firm or association of persons
for the period upto the date of such
partition, dissolution or disruption may
be assessed as if no such partition,
dissolution or disruption had taken place
and all the provisions of this Act shall

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apply accordingly; and

(b) every person who was, at the time of
such partition, dissolution or disruption,
a member or partner of an undivided
Hindu family, firm or association of
persons shall, notwithstanding such
partition, dissolution or disruption, be
liable severally and jointly for the
payment of the tax including interest
and penalty, if any, payable under this
Act by such family, firm or association
of persons, whether assessment is
made prior to or after such partition,
dissolution or disruption.
(2) Where the registration certificate of a dealer is
cancelled under this Act in any case, other than that of a
partition of Hindu Undivided Family or dissolution or
disruption of a firm or association of persons, the tax
payable under this Act by such dealer for the period upto
the date of cancellation of the registration certificate may
be assessed on such dealer as if no such cancellation had
taken place and all the provisions of this Act shall apply
accordingly.

Liability of 42. Where a dealer, liable to pay tax under this Act, dies,
legal heirs to then
pay tax.
(a) if the business carried on by the dealer is
continued after his death by his legal
representative or any other person, such legal

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representative or other person shall be liable

to pay the tax (including any penalty ) due from
the dealer under this Act, whether such tax
(including any penalty) has been assessed
before his death but has remained un-paid, or
is assessed after his death; and
(b) if the business carried on by the dealer is
discontinued after his death, his legal
representative shall be liable to pay out of the
estate of the deceased to the extent the
estate is capable of meeting the charge, the
tax (including any penalty) due from the
dealer under this Act, whether such tax
(including any penalty) has been assessed
before his death, or is assessed after his
death,
the provisions of this Act shall, so far as may be, apply to
such legal representative, or other person as if he were the
dealer himself.

Bar of 43. No assessment made and no order passed, under this

certain
Act, or the rules made thereunder, by the Commissioner or
proceedings.
any person appointed under section 3 to assist him shall
be called into question in any civil court and, save as
provided in sections 45, 46 and 48, no appeal or
application for revision shall lie against any such
assessment or order.

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CHAPTER-VI
APPEAL, REVISION AND RECTIFICATION.

Tribunal 44. (1) The State Government shall by notification,

establish an appellate tribunal consisting of a Chairperson
and as many members as the Government may, from time
to time, deem fit for the proper discharge of the functions
conferred on the Tribunal by or under this Act.

(2) The Chairperson and the member shall possess such

qualification as may be prescribed, and their terms of office
shall be such as may be prescribed.

(3) The tenure of the Chairperson and members shall

ordinarily be four years which may be extended by the
State Government, by such period as it may think fit, but
shall not be beyond the age of 62 years in any case.

(4) The salary, allowances and conditions of service of the

Chairperson and other members of the tribunal, shall be
such as may be prescribed.

(5) All cases coming before the tribunal shall be decided

by a bench according to the opinion of the majority, and in
any case where the Chairperson and the members are
divided in their opinion on any point or points, they shall
state the point or points on which they differ and refer the
case for hearing by a bench consisting of, -
(i) the Chairperson and the member who first heard
it; and
(ii) an additional co-opted member who is serving

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and qualified to be appointed as member under

sub-section (2),
and such case shall be decided in accordance with the
opinion of the majority of members of the bench:
Provided that the additional member shall
cease to hold the office on the disposal of the case.

(6) Subject to such conditions and limitations as may be

prescribed, the tribunal may award costs and the amount
of such costs which remains unpaid after the due date,
shall be recoverable from the person ordered to pay the
same as arrears of Land Revenue.

(7) The seal of the tribunal and the procedure to be

followed by it shall be such as the State Government may
prescribe.

(8) The State Government may appoint such officers and

officials, as may be required, to assist the tribunal in the
discharge of its functions under this Act:
Provided that the cases of the State shall be
represented before the Tribunal by an officer not below the
rank of Assistant Excise and Taxation Commissioner
(Legal).

Appeal 45. (1) An appeal from every original order passed under
this Act or rules made thereunder shall lie-
(a) if the order is made by an Assessing
Authority or by an officerincharge of
the check post or barrier or any other

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officer not below the rank of the Excise

and Taxation Officer, to the Deputy
Excise and Taxation Commissioner;
(b) if the order is made by the Deputy
Excise and Taxation Commissioner, to
the Commissioner or the Additional
Excise and Taxation Commissioner,
posted at the State Headquarters;
(c) if the order is made by the
Commissioner or the Additional Excise
and Taxation Commissioner posted at
the State Headquarters any officer
exercising the powers of the
Commissioner, to the Tribunal.

(2) An order passed in appeal by a Deputy Excise and

Taxation Commissioner or by the Additional Excise and
Taxation Commissioner posted at the State Headquarters
or by the Commissioner or any officer, on whom the
powers of the Commissioner are conferred, shall be
further appealable to the Tribunal.

(3) Every order of the Tribunal, the Commissioner or any

officer exercising the powers of the Commissioner or the
Additional Excise and Taxation Commissioner posted at
the State Headquarters or the order of the Deputy Excise
and Taxation Commissioner or of the Assessing Authority
or an officer in-charge of check-post or barrier or any

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other officer not below the rank of an Excise and Taxation

Officer, if not challenged in appeal or revision, shall be
final.

(4) No appeal shall be entertained unless it is filed within

sixty days from the date of communication of the order
appealed against, or such longer period as the Appellate
Authority may allow, for reasons to be recorded in writing.

(5) No appeal under sub-section (1) shall be entertained by

an Appellate Authority unless such appeal is accompanied
by satisfactory proof of the payment of the tax (including
interest payable) or of the penalty, if any, imposed or both
as the case may be:
Provided that if such Authority is satisfied that
the dealer is unable to pay the tax (including interest
payable) assessed or the penalty, if any, imposed or both,
he may, for reasons to be recorded in writing, entertain an
appeal without the tax (including interest payable) or
penalty or both having been paid in full or after part
payment of such tax (including interest payable) or penalty
or both.

(6) Subject to such rules of procedure as may be

prescribed, an Appellate Authority may pass such order on
appeal as it deems just and proper.

Revision. 46. (1) The Commissioner may, of his own motion, call for
the record of any proceedings which are pending before, or
have been disposed of by, any Authority subordinate to

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him, for the purpose of satisfying himself as to the legality

or propriety of such proceedings or order made therein
and, on finding the proceedings or the orders prejudicial to
the interest of revenue, may pass such order in relation
thereto as he may think fit:
Provided that the powers under this sub-section
shall be exercisable only within a period of five years from
the date on which such order was communicated.

(2) The State Government may, by notification, confer on

any officer powers of the Commissioner under sub-section
(1) to be exercised subject to such conditions and in
respect of such areas as may be specified in the
notification and such officer shall be deemed to be the
Commissioner for the purposes of sub-section (1).

(3) The tribunal, on application made to it against an order

of the Commissioner under this section within sixty days
from the date of the communication of the order, for the
purpose of satisfying itself as to the legality or propriety
of such order, may call for and examine the record of any
such case and may pass such orders thereon as it thinks
just and proper.

(4) No order shall be passed under this section, which

adversely affects any person unless such person has been
given a reasonable opportunity of being heard.

Rectification 47. (1) The Tribunal or Commissioner or the officer on

of mistakes.
whom powers of the Commissioner for the purposes of

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sub-section (1) of section 46 have been conferred by the

State Government may at any time within one year from
the date of any order passed by him on an application
made to him or of his own motion, rectify any mistake
apparent from the record, and shall within a like period
rectify any such mistake which has been brought to his
notice by any person affected by such order:

Provided that the Commissioner may entertain

an application under this sub-section after the expiry of the
said period of one year, if he is satisfied that the applicant
was prevented by sufficient cause from making the
application in time:
Provided further that no such rectification shall
be made if it has the effect of enhancing the tax or
reducing the amount of refund, unless the Commissioner
has given notice in writing to such person of his intention to
do so and has allowed such person a reasonable
opportunity of being heard.

(2) Where any such rectification has the effect of

enhancing or reducing the amount of tax or penalty, the
Commissioner shall, in the prescribed manner, order the
recovery of the amount due from or as the case may be,
order the refund of the amount due to, such person.

Revision to 48. (1) Any person aggrieved by an order made by the

High Court.
tribunal under sub-section (2) of section 45 or under sub-
section (3) of section 46, may, within 90 days of the

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communication of such order, apply to the High Court of

Himachal Pradesh for revision of such order if it involves
any question of law arising out of erroneous decision of law
or failure to decide a question of law.

(2) The application for revision under sub-section (1) shall

precisely state the question of law involved in the order,
and it shall be competent for the High Court to formulate
the question of law.

(3) Where an application under this section is pending, the

High Court may, or on application, in this behalf, stay
recovery of any disputed amount of tax, penalty or interest
payable or refund of any amount due under the order
sought to be revised:

Provided that no order for stay of recovery of

such disputed amount shall remain in force for more than
30 days unless the applicant furnishes adequate security to
the satisfaction of the Assessing Authority concerned.

(4) The application for revision under sub-section (1) or the

application for stay under sub-section (3) shall be heard
and decided by a bench consisting of not less than two
judges.

(5) No order shall be passed under this section which

adversely affects any person unless such person has been
given a reasonable opportunity of being heard.

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Power of 49. The Tribunal or the Commissioner or any person

authorities to
appointed under sub-section (1) of section 3 shall, for the
take evidence
on oath etc. purposes of this Act, have the same powers as are vested
in a court under the Code of Civil Procedure, 1908 when
trying a suit, in respect of the following matters, namely:--
(a) enforcing the attendance of any person and
examining him on oath or affirmation;
(b) compelling the production of documents and
impounding or detaining them;
(c) issuing commissions for the examination of
witnesses;
(d) requiring or accepting proof of facts by
affidavits;
(e) such other powers as may be prescribed;
and any proceeding under this Act before the
Commissioner or any person appointed to assist him under
sub-section (1) of section 3 shall be deemed to be a
judicial proceeding within the meaning of sections 193
and 228 and for the purposes of section 199 of the Indian
45 of 1860 Penal Code, 1860.

CHAPTER-VII
OFFENCES AND PENALTIES

Offences and 50. (1) Any person who----

penalties.
(a) wilfully acts in contravention of the provisions
of this Act or the rules made thereunder; or
(b) furnishes any certificate, declaration, bill, cash
memorandum, voucher, delivery note, goods

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receipt or other document, which he knows or

has reason to believe it to be false; or
(c) being a registered dealer, falsely represents
when purchasing any class of goods for use
by him in the manufacture of any goods for
sale, that goods of such class are covered by
his certificate of registration; or
(d) not being a registered dealer, falsely
represents when purchasing goods in
Himachal Pradesh that he is a registered
dealer; or
(e) after purchasing any goods for any of the
purposes specified in the Act, fails, without
reasonable excuse, to make use of the goods
for any such purpose; or
(f) has in his possession any form issued under
the Act on payment by the Government, which
has not been obtained by him or by his
principal or by his agent in accordance with
the provisions of this Act or any rules made
thereunder; or
(g) prevents inspection or examination of books,
documents and accounts or knowingly
maintains false books, documents and
accounts or wilfully fails to produce the books,
documents and accounts mentioned in
section 32; or
(h) fails to carry with him any of the records or

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documents specified in section 34; or

(i) makes any statement or declaration in any of
the documents specified in section 34 or
section 35, as the case may be, which
statement or declaration he knows or, has
reasons to believe to be false; or
(j) in any way is knowingly concerned in any
fraudulent evasion or attempt at evasion or
abetment of evasion of any tax payable in
respect of the sale or purchase of any
goods under this Act; or
(k) if he is a driver or any other person-in-charge
of goods vehicle or vessel or an owner of the
goods, refuses on demand by the officer-in-
charge of the check post or barrier or any
other officer, not below the rank of an Excise
and Taxation Inspector, to give his name and
address or the name and address of the
owner of the goods vehicle or of the
consignor or consignee of the goods or gives
any name and address of any of these
persons, which he knows or has reason to
believe to be false; or
(l) aids or abets any person in the commission of
any offence specified in this sub-section;
he shall, without prejudice to the recovery of any tax or
interest or penalty which may be due from him, be
punishable with simple imprisonment which may extend to

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six months, or with fine, or with both; and when the offence
is a continuing offence, with a daily fine which may extend
to fifty rupees for every day during which the offence
continues.

(2) Whosoever contravenes or fails to comply with, any of

the provisions of this Act or the rules made thereunder, or
any order or direction made or given thereunder, shall, if
no other penalty is provided either under sub-section (1)
of this section or under any other provisions of this Act for
such contravention or failure, be liable to imposition of a
penalty, not exceeding two thousand rupees, and where
such contravention or failure is continuing one, to a daily
penalty not exceeding fifty rupees during the period of the
continuance of the contravention or failure.

(3) Any officer-in-charge of the check post or barrier or

any other officer, not below the rank of an Excise and
Taxation Officer, appointed under sub-section (1) of
section 3 or such other officer as the State Government
may, by notification, appoint, may, after affording to the
person concerned a reasonable opportunity of being
heard, impose the penalty mentioned in sub-section (2):
Provided that the officer-in-charge of the check
post or a barrier shall exercise such powers only at such
check posts or barriers.

Compounding 51. (1) The Commissioner or any other officer not below
of offences.
the rank of Assistant Excise and Taxation Commissioner

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or Excise and Taxation Officer-Incharge of the district may,

either before or after the institution of proceedings for any
offence punishable under section 50 or under any rule
made under this Act, accept from any person accused of
such offence by way of composition of offence a sum of
money equal to double the amount of tax which would
have been payable on the turnover of sales or purchases
to which the said offence relates, whichever is greater.

(2) On payment of such sum as may be determined under

sub-section (1), no further proceedings shall be taken
against the accused person in respect of the same
offence and any proceedings, if already taken, shall stand
abated.

Cognizance 52. (1) No Court shall take cognizance of any offence

of offences.
punishable under this Act or the rules made thereunder
except with previous sanction of the State Government or
of such officer as may be authorised by a notification
published in Official Gazette and no Court inferior to that of
a Magistrate of the first class shall try any such offence.

(2) Subject to the condition, if any, as may be prescribed,

the Commissioner, may authorise, either generally or in
respect of a particular case or class of cases, any officer or
person subordinate to him to investigate all or any of the
offences punishable under this Act.

(3) All offences punishable under sub-section (1) of section

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49 shall be non-cognisable and bailable.

CHAPTER-VIII
MISCELLANEOUS
Directors of 53. Notwithstanding anything contained in any other law,
defaulting
where any tax assessed or penalty imposed under this Act
companies to
be liable to on a company cannot be recovered by reason of the
pay tax etc.
company having gone into liquidation or for any other
reason, then every person, who was Director of such
company at any time during the relevant period for which
the tax is due or in respect of which the default for which
the penalty is imposed was committed, shall be jointly and
severally liable for the payment of such tax and penalty
unless he proves that the non-payment or non-recovery
cannot be attributed to any neglect, mis-feasance or
breach of duty on his part in relation to the affairs of the
company.

Disposal of 54. Any property seized or detained under this Act, which
certain
is not claimed by any person, shall be disposed of in
property.
accordance with the provisions of sections 25, 26 and 27 of
the Police Act, 1861, as if the officer or Authority seizing or
detaining such property were a police officer:
Provided that if, during the period allowed in
accordance with such provisions, any person claims the
property, it shall not be released to him unless the tax or
penalty or both due in respect of the same under this Act is
paid by such person.

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Indemnity. 55. No suit, prosecution or other legal proceedings shall

lie against any officer or servant of the State Government
for anything which is in good faith done or intended to be
done under this Act or the rules made thereunder.

Returns etc. 56. (1) All particulars contained in any statement made,
to be
return furnished or accounts or documents produced in
confidential.
accordance with this Act, or in any record of evidence given
in the course of any proceedings under this Act other than
proceedings before a criminal court, shall, save as provided
in sub-section (3), be treated as confidential and
notwithstanding anything contained in the Indian Evidence
1 of 1872 Act, 1872, no court shall, save as aforesaid, be entitled to
require any officer, of the State Government to produce
before it any such statement, return, accounts, document or
record or any part thereof, or to give evidence before it in
respect thereof.

(2) If, save as provided in sub-section (3), any officer of the

State Government discloses any of the particulars referred
to in sub-section (1), he shall be punishable with
imprisonment which may extend to six months, and shall
also be liable to fine.

(3) Nothing contained in this section shall apply to the

disclosure-
(a) of any such particulars in respect of any
such statement, return, accounts,
document, evidence, affidavit or deposition

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45 of 1860 for the purpose of any prosecution under

this Act or the Indian Penal Code, 1860; or
(b) of any such particulars to any person
entrusted with the administration of this Act
for the purposes of carrying out the objects
of this Act; or
(c) of any such particulars when such
disclosure is occasioned by the lawful
employment under this Act of any process
for the service of any notice or summons or
the recovery of any demand; or
(d) of any such particulars to a civil court in any
suit to which the State Government in the
Excise and Taxation Department or any
officer of the said Department is a party and
which relates to any matter arising out of
any proceeding under this Act; or
(e) of any such particulars to any officer
appointed to audit receipts or refunds of the
tax imposed by this Act; or
(f) of any such particulars where such
particulars are relevant to any enquiry into
the conduct of an official of the Excise and
Taxation Department of the State
Government to any person or persons
appointed by the Commissioner under the
Public Servants (Inquiries) Act, 1850, or to
any officer otherwise appointed to hold such

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inquiry or to a Public Service Commission

established under the Constitution when
exercising its functions in relation to any
matter arising out of such inquiry; or
(g) of the annual gross turnover, shown in any
return furnished or determined in any
assessment order passed under this Act, to
any officer of the Central or any State
Government, as may be necessary for the
purpose of enabling that Government to
levy or realise any tax or duty imposed by
it; or
(h) of any such particulars which are relevant to
any inquiry into the charge of misconduct,
against an income- tax practitioner or other
person who represents any assessee
before any Authority in any proceeding
under this Act; or
(i) of any such particulars to the Director of
Economics and Statistics Department of the
State Government as may be necessary for
enabling him to work out the incidence of
tax on any commodity or for carrying out
any statistical survey of trade, commodity or
dealer; and
(j) of any such particulars for the purpose of
preparing data by computerization :

Provided that the information mentioned in

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clauses (a), (f) and (g) may be permitted to be disclosed by

the Assistant Excise and Taxation Commissioner or the
Excise and Taxation Officer, In-charge of the District only
when he is satisfied, after scrutiny of the request made in
this behalf and after such enquiries as he considers
necessary, that the disclosure is admissible under this sub-
section.

Persons 57. All persons appointed under sections 3 and 44 shall be

appointed to
deemed to be public servants within the meaning of section
be public
servants. 21 of the Indian Penal Code.

Provision in 58. Notwithstanding anything contained in this Act, -

case of inter-
(a) a tax on the sale or purchase of goods shall not be
State trade
etc. imposed under this Act -
(i) where such sale or purchase takes place
outside the State of Himachal Pradesh; or
(ii) where such sale or purchase takes place in
course of import of the goods into, or export of
the goods out of, the territory of India; and
(b) a tax on the sale or purchase of any goods shall not be
imposed where such sale or purchase takes place in
the course of inter-State trade or commerce except in
so far as Parliament may by law otherwise provide.

Power to 59. An officer exercising the powers under this Act may take
seek
assistance of any police officer or other officer of the
assistance
from police Government, as and when required and upon such request
and other
for assistance being made, the police officer or the other
officers.

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officer shall render necessary assistance in accordance with

law.

Scrutiny of 60. (1) Without prejudice to the provisions of sub-section (4)

returns.
of section 21, at any time in the year, every Assessing
Authority may undertake scrutiny of the returns filed during
any tax period for ascertaining compliance of the provisions
of sub-sections (3) and (4) of section 16 and to check
correctness of application and calculation of rates of tax,
penalty and interest payable, claim of input tax credit and
payment of full amount of tax due according to such return.

(2) If any mistake is detected as a result of such scrutiny

made as per the provisions of sub-section (1), the Assessing
Authority shall serve a notice in the prescribed form on the
dealer to make payment of the extra amount of tax, penalty
and interest.

(3) The Assessing Authority may also identify the dealers

who have not filed the return for any tax period or not paid
the tax, and shall, besides initiating action under section 16,
serve a notice in the prescribed form directing such dealer to
forthwith file such return and pay the amount of tax, penalty
and interest due.

Audit and 61. (1) The Commissioner or any other Authority as may be
inspection.
authorised by him in this behalf may, for ascertaining the
correctness of returns furnished, admissibility of various
claims and input tax credit, on the basis of any prescribed
criteria or on random basis, inspect or audit or cause to be

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audited any of the returns furnished, documents or statutory

forms submitted by a dealer, subject to such conditions and
in such manner as may be prescribed.

(2) The inspection or audit as required under sub-section

(1), may either be under taken in the office of such Authority
or in the business premises, or warehouse, or office of the
dealer.

(3) The prescribed authority shall after considering all the

evidence produced in the course of proceedings either, --
(a) confirm the self-assessment under sub-section
(1) of section 21; or
(b) not confirm the self-assessment under sub-
section (1) of section 21 and calculate the amount
of tax due from the dealer; or
(c) calculate the amount of tax due from a dealer, if
no such assessment has been made:

Provided that if the prescribed authority

proposes to rely upon any evidence collected by him in the
course of inspection, audit or investigation, the dealer shall,
by a notice, be afforded an opportunity of correcting his self-
assessment within a period not exceeding thirty days and if
he fails to rectify his self-assessment, such authority shall
re-assess the tax due, under the Act.

Transitional 62. (1) Any registered dealer, who would have continued to
provisions.
be so liable to pay tax under the Himachal Pradesh General
Sales Tax Act, 1968, (hereinafter in this section called the

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said Act) had this Act not come into force, shall be deemed
to be registered under this Act.

(2) Where, on the date of commencement of this Act, a

registered dealer holds the stock of any taxable goods,
purchased by him on or after 1st April, 2004, he shall furnish
the particulars thereof, in such form within such period, in
such manner and to such Authority, as may be prescribed.

(3) Where the taxable goods, referred to in sub-section (2),

held in stock by a registered dealer (other than the dealers
falling in section 7 or sub-section (2) of section 16) on the
date of commencement of this Act are those on which tax
under the said Act has suffered at the first stage of sale, and
are resold by him after the commencement of this Act, an
input tax credit shall be allowed to him in respect of the
amount of tax proved to have been paid, on the purchase of
such goods, under the said Act:

Provided that the input tax credit shall be allowed

to a dealer, registered under this Act on or after 1st day of
April, 2005, in respect of purchases of taxable goods where
such purchases are for resale or use in manufacture of
goods for sale and that such purchases have been made
within three months prior to the date of registration.

(4) The Financial Commissioner functioning under the said

Act before the commencement of this Act shall, on and from
the date of commencement of this Act, continue to function
as such under this Act, until the State Government,

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establishes the Tribunal under section 44.

(5) Any dealer who manufactures and sells goods and who,
immediately before the commencement of this Act, was
enjoying the benefit of any incentive of sales tax leviable on
the sale of manufactured goods under the said Act and who
would have continued to be eligible for such incentive on the
date of commencement of this Act, had this Act not come
into force, may be allowed by the State Government, by
notification, --
(a) to continue to avail of the benefit of exemption
from payment of tax on the sale of manufactured
goods made by such dealer himself for the
unexpired period, subject to the condition that no
input tax credit shall be allowed to the subsequent
dealer purchasing goods manufactured and sold
by such dealer (industrial unit), or

(b) to opt, in the prescribed manner, to avail of

the facility of making deferred payment of tax
for the unexpired period of incentive instead
of availing the exemption specified in clause
(a), or

(c) to continue to avail of the facility of making

deferred payment of tax on the sale of
manufactured goods made by such dealer
himself for the unexpired period and such
dealer (industrial unit) shall be eligible to issue

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tax invoice and to claim input tax credit subject

to the provisions of section 11 of this Act.
(6) Notwithstanding anything to the contrary, contained in
this Act, the State Government may accept from any
registered dealer, who is an importer, or manufacturer and is
not entitled to enjoy the benefit of exemption from payment
of tax, or deferment of payment of tax, who, may at his
option pay, in lieu of the tax payable by him on the sale of
such goods, the tax at such rate on the maximum retail price
of such goods, as the State Government may by notification,
specify, and different rates of tax may be fixed for different
items of such goods.

Power to 63. (1) The State Government may by notification in the

make rules.
Official Gazette, make rules consistent with this Act, for
securing the levy and collection of tax and generally for
carrying out the purposes of this Act.

(2) All rules made under this Act shall be laid, as soon as
may be, after they are made, before the Legislative
Assembly, while it is in session, for a total period of fifteen
days which may be comprised in one session or in two
successive sessions and, if before the expiry of the session
in which they are so laid or of the session immediately
following, the Assembly agrees in making any modifications
in the rules or the Assembly decides that the rule should not
be made, such rules shall have effect only in such modified
form or be of no effect, as the case may be. However, that
any such modification or annulment shall be without

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prejudice to the validity of anything done earlier under that

rule.

Repeal and 64. (1) The Himachal Pradesh General Sales Tax Act, 1968,
Savings.
(hereinafter in this section called the aforesaid Act) is
24 of 1968
hereby repealed from the date of coming into force of this
Act:
Provided that such repeal of the aforesaid Act
shall not affect, --
(a) the previous operation of the aforesaid Act or
anything duly done or suffered thereunder; or
(b) any right, privilege, obligation or liability acquired,
accrued or incurred under the aforesaid Act; or
(c) any penalty, forfeiture or punishment incurred in
respect of any offence committed against the
aforesaid Act; or
(d) any investigation, legal proceedings or remedy in
respect of any such right, privilege, obligation,
liability, penalty, punishment as aforesaid; and
any such investigation, legal proceedings or remedy may be
instituted, continued or enforced and any such penalty,
forfeiture or punishment may be imposed as if the aforesaid
Act had not been repealed.

(2) Unless it is otherwise expressly provided

(a) anything done or any action taken (including any

appointment, notification, notice, order or rule or use of
any form or declaration) in the exercise of any power

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conferred by or under the aforesaid Act shall, in so far as

it is not inconsistent with the provisions of this Act,
continue to be in force and be deemed to have been
done or taken in the exercise of the powers conferred by
or under the provisions of this Act as if this Act were in
force on the date on which such thing was done or such
action was taken unless and until it is superseded by or
under this Act and all arrears of tax and other amount
due under the aforesaid Act, at the commencement of
this Act may be recovered as if they had accrued under
this Act;

(b) any account, register or document seized under any

provision of the aforesaid Act and not released shall
continue to be retained, till the same is released, in
accordance with the provisions of the aforesaid Act;
and

(c) any goods seized or detained under any provision of the

aforesaid Act or the rules made thereunder and not
released shall continue to remain seized or detained, till
such goods are released, in accordance with the
provisions of aforesaid Act.

(3) Any assessment, appeal, revision or other proceeding

arising under the aforesaid Act and the rules made
thereunder and or pending before an officer or Authority duly
empowered to make assessment or hear and decide such
appeal, revision or other proceeding immediately preceding

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the commencement of this Act shall, on the date of such

commencement stand transferred to the officer or Authority
competent to make assessment or to hear and decide
appeal or revision or other proceedings under this Act and
thereupon such assessment shall be made or such appeal or
revision or other proceeding shall be heard and decided
within the period, if any, specified therefore, by such officer
or Authority in accordance with the provisions of the
aforesaid Act or the rules made thereunder as if they were
the officers or authorities duly empowered for the purpose
under the aforesaid Act.

(4) Any application by a dealer or the Commissioner to the

Financial Commissioner for making a reference to the High
Court under section 33 of the aforesaid Act; or any reference
made to the High Court under section 33 of aforesaid Act,
pending on the date of commencement of this Act shall be
disposed of by the Financial Commissioner or the High
Court, as the case may be, in accordance with the provisions
of section 33 of the aforesaid Act as if this Act had not been
enacted and the aforesaid Act had not been repealed.

(5) Notwithstanding anything contained in sub-section (1),

any appeal, revision or other proceeding arising under the
aforesaid Act but preferred or initiated after the
commencement of this Act, shall be heard and decided by
the Authority competent to entertain any appeal, revision or
any other proceeding in accordance with the provisions of
this Act.

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SCHEDULE A

(See clause (a) of sub-section (1) of section 6)

PARTI: GOODS TAXABLE @ 1 percentum

Sr.No. Goods
1. 2.
1. Gold, silver, other precious metals, precious stones and
ornaments thereof.

PART--II: GOODS TAXABLE @ 4 percentum

1. Agricultural implements not operated manually or not driven by

animal.
2. All equipments for communication such as, Private Branch
Exchange (P.B.X.) and Electronic Private Automatic Branch
Exchange (E.P.A.B.X.) etc.
3. All intangible goods like copyright, patent and representative
licence etc.
4. All kinds of bricks including fly ash bricks, refractory bricks and
asphaltic roofing earthen tiles.
5. All types of yarn other than cotton and silk yarn in hank and
sewing thread.
6. Aluminium utensils and enamelled utensils.
7. Areca nut, betel nut and betel nut powder.
8. Bamboo, pulp of bamboo, bamboo paper, wood and its articles
(other than those covered by item No. 5 of Schedule B).
9. Bearings.
10. Belting.
11. Betel leaves.
12. Bidi leaves.
13. Bicycles, tricycles, cycle rickshaws and parts.
14. Bitumen.
15. Bone meal.
16. Branded Bread.
17. Bulk drugs and other drugs, medicines and medical plant and
equipment.
18. Capital Goods.
19. Castings.
20. Centrifugal, mono block and submersible pumps and parts
thereof.

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21. Coffee beans and seeds, cocoa pod, green tea leaves and
chicory.
22. Chemical fertilizers and chemical fertilizer mixtures; Insecticides,
pesticides, rodenticides, fungicides, weedicides, herbicides, plant
regulators and plant growth nutrients.
23. Coir and coir products excluding coir mattresses.
24. Cotton and cotton waste.
25. Crucibles.
26. Declared goods as specified in section 14 of the Central Sales
Tax Act, 1956 (Central Act, 74 of 1956).
27. Edible oils, oil cake and de-oiled cake.
28. Electrodes including welding electrodes and welding rods.
29. Exercise books (except those specified in item No. 25 of
Schedule B), graph book and laboratory note book.
30. Ferrous and non-ferrous metals and alloys; non-metals such as
aluminium, copper, zinc and extrusions thereof
31. Fibres of all types and fibre waste.
32. Flour (atta), maida, suji, besan etc.
33. Fried grams.
34. Gur, jaggery and edible variety of rub-gur.
35. Hand pumps and spare parts.
36. Herbs, bark, dry plants or dry roots, commonly known as jari booti
and dry flowers.
37. Hose pipes.
38. Hosiery goods.
39. Husk and bran of cereals.
40. Ice.
41. Imitation jewellery
42. Incense sticks commonly known as aggarbati, dhupkathi and
dhup bati.
43. Industrial cables (high voltage cable, XL PE cables, jelly-filled
cables, optical fibre cables).
44. IT products including computers, telephone (including mobile
handsets and parts thereof, teleprinter and wireless equipments
and parts thereof) and other products as may be notified.
45. Industrial input and packing materials as may be notified.
46. Leaf plates and cups (other than those specified in item No. 29 of
Schedule B).
47. Murmuralu, pelalu, atakutu, puffed rise, muri.
48. Newars.
49. Napa slabs (rough flooring stones).

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50. Ores and minerals.

51. Paddy, rice, wheat and pulses.
52. Paper and news print.
53. Pipes of all varieties including G.I. pipes, C.I. pipes, Ductile pipes
and PVC pipes.
54. Plastic footwear.
55. Printed material including diary and calendar.
56. Printing ink excluding toner and cartridges.
57. Rail coaches, engines and wagons.
58. Readymade garments.
59. Renewable energy devices and parts thereof.
60. Safety matches.
61. Sewing machines.
62. Ship and other water vessels.
63. Silk fabrics (subject to abolition of rental agreement).
64. Skimmed milk powder.
65. Solvent oils other than organic solvent oil.
66. Spices of all varities and forms including cumin seed, aniseed,
turmeric and dry chillies.
67. Sports goods excluding apparels and footwear.
68. Starch.
69. Sugar and khandsari.
70. Tamarind.
71. Textile fabrics.
72. Tobacco.
73. Tractors, threshers harvesters and attachments and parts thereof.
74. Transmission towers.
75. Umbrella except garden umbrella.
76 Vanaspati (hydrogenated vegetable oil).
77 Vegetable oil including gingili oil and bran oil.
78. Writing instruments (other than those specified in item No. 25 of
Schedule B).

Note: - The rate of tax in respect of Sugar, Textile fabrics and Tobacco,
specified at Sr. No. 69, 71 and 72 of this Schedule, shall be
applicable from the date as the State Government may notify.

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PART-III: GOODS TAXABLE @ 12.5 percentum

1. All other goods than those specified in PartI, Part-II, Part-IV,

Part-V and Part-VI of Schedule A or in Schedule B or in
Schedule C or in Schedule D.

PARTIV: GOODS TAXABLE @ 20 percentum

Sr.No. Goods
1. 2.
1. Arms and ammunition
2. Lottery tickets

PARTV: GOODS TAXABLE @ 30 percentum

Sr.No. Goods
1. 2.
1. Lime-stone (non-L.D. Grade)
2. Timber (excluding converted timber)

PARTVI: GOODS TAXABLE @100 percentum

Sr.No. Goods
1. 2.
1. Lime-stone (L.D. grade)

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SCHEDULE B
(See section 9)

GOODS EXEMPTED FROM TAX

Sr. Goods Conditions of

No. exemption
1. 2. 3.
1. Agriculture or horticulture produce, including -
herbs or saplings of trees sold by person or a
member of his family, grown by himself or grown
on any land in which he has an interest whether
as owner or usufructuary mortgagee, tenant or
otherwise.
2. Agricultural implements manually operated or -
animal driven.
3. Aids and implements used by handicapped -
persons.
4. Animal feed and feed supplements, namely, -
processed commodity sold as poultry feed,
cattle feed, pig feed, fish feed, fish meal, prawn
feed, shrimp feed and feed supplements and
mineral mixture concentrates, intended for use
as feed supplements including grass, hay and
straw.
5. Articles made of bamboo-wood used for -
agricultural purposes.
6. Baan. -
7. Books, periodicals and journals. -
8. Charkha, Ambar Charkha; handlooms, -
Himachali handloom articles, Himachali
handloom shawls, caps and handspun yarn,
and Gandhi Topi.
9. Charcoal. -
10. Coarse grains other than paddy, rice and wheat. -
11. Condoms and contraceptives. -
12. Cotton yarn in hank and silk yarn in hank. -
13. Curd, lassi, butter milk and separated milk. -
14. Earthen pots (unglazed). -
15. Electric Energy. -
16. Fire wood. When sold for
domestic use

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17. Fishnet, fish fabrics and fish seeds. -

18. Foodgrains supplied free of cost by the -
Government of India.
19. Fresh fruits. -
20. Fresh milk and pasteurised milk. -
21. Fresh plants, sapling and fresh flowers. -
22. Fresh vegetables. -
23. Garlic, ginger, green chillies, onions, potatoes, -
sweet potatoes, tapioca and their seeds.
24. Glass bangles (including plastic shell and lac -
bangles).
25. Graphite pencils, writing chalk, crayons, sketch, -
pens, drawing colour eraser, sharpener,
footrules, geometry boxes, ink tablets, exercise
and drawing books of the type used in schools
and takhties used by students.
26. Human blood and blood plasma. -
27. Indigenous handmade musical instruments. -
28. Kumkum, bindi, alta and sindur. -
29. Leaf plates and leaf-cups (when not
compressed).
30. Meat, fish, prawn and other aquatic products Except when sold
when not cured or frozen; eggs and live stock in sealed
and animal hair. containers
31. National flag. -
32. Non-Judicial stamp paper sold by Government
Treasuries; postal items like envelope, postcard -
etc. sold by Government; rupee note when sold
to the Reserve Bank of India and cheques,
loose or in book form.
33. Organic manure. -
34. Raw wool. -
35. Seeds.
36. Semen including frozen semen. -
37. Silk worm laying cocoon and raw silk. -
38. Tender green coconut. -
39. Toddy, Neera and Arak. -
40. Unbranded bread. -
41. Unprocessed and unbranded salt. -
42. Water other than
(i) aerated, mineral, distilled, medicinal, -
ionic, battery, demineralised water,

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and
(ii) water sold in sealed container.
43. Writing slate and slate pencils. -
44. Kerosene oil sold through Public Distribution -
System.
45. Processed and branded salt. -

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SCHEDULE C

(See clause (b) of sub-section (1) of section 6)

GOODS SUBJECT TO PURCHASE TAX

Sr.No. Goods
1. 2.
1. Resin (crude pine gum)
2. Khair, Eucalyptus and Popular trees when they have fallen or
have been felled or agreed to be felled including their stumps,
roots, fuel wood and other wood in all forms when purchased
from the growers within the State.

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SCHEDULE D

(See clause (c) of sub-section (1) of section 6)

Sr.No. Goods
1. 2.
1. Motor-spirit (Petrol including Aviation Turbine Fuel and Diesel).
2. Liquor.

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STATEMENT OF OBJECTS AND REASONS

The taxes on the sale and purchase of goods are at present

levied under the Himachal Pradesh General Sales Tax Act, 1968 and tax is
being collected at the first point only. With a view to evenly distribute the
impact of levy on all value additions in the course of transactions, avoid
cascading effect of taxation and eliminate fiscally unsalutary and harmful
tax practices like tax havens or preferential tax regimes creating tax-rate
war amongst the States, it has been decided at the national level
conferences of the Chief Ministers of all the States to uniformly reform the
existing commodity-taxation and replace it by a more wholesome, rational
and effective system of value added taxation. Accordingly, it is considered
essential to introduce the value added tax system of levy of tax on sales or
purchases of goods in the State. This has necessitated the enactment of
new legislation.

The Bill seeks to achieve the aforesaid objectives.

(RANGILA RAM RAO),

Minister-in-Charge.

SHIMLA:

The .2005.

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FINANCIAL MEMORANDUM

The provisions of this Bill are designed to replace levy of tax

on purchases and sales under the Himachal Pradesh General Sales Tax
Act, 1968, by a more rationalised levy which is likely to yield about Rs.500
crores per annum. The provisions of the Bill, when enacted will be
administered by the existing machinery of the Excise and Taxation
Department without incurring extra expenditure.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 63 of the Bill seeks to empower the State Government

to make rules for carrying out the purposes of the Act. The proposed
delegation of powers are essential and normal in character.

RECOMMENDATION OF THE GOVERNOR UNDER ARTICLE 207 OF

THE CONSTITUTION OF INDIA.

(Excise and Taxation Department File No. EXN-F (11) 5/ 2004)

The Governor, Himachal Pradesh after having been informed
of the subject matter of the Himachal Pradesh Value Added Tax Bill, 2005,
recommends, under article 207 of the Constitution of India, the introduction
in and consideration by the Legislative Assembly of the said Bill.

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THE HIMACHAL PRADESH VALUE ADDED TAX BILL, 2005.

BILL

to re-enact the law to provide for the levy of a value added tax on the
sales or purchases of goods in the State of Himachal Pradesh and for
certain other matters connected therewith.

(RANGILA RAM RAO),

Minister-in-Charge.

(SURINDER SINGH THAKUR),

Secretary (Law).

SHIMLA:

The .2005.

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SCHEDULE A
(See clause (a) of sub-section (1) of section 6)

PARTI:
GOODS TAXABLE @ 1 percentum
Sr. Goods
No.
1. Gold, silver, other precious metals, precious stones and ornaments
thereof.
PART--II:
GOODS TAXABLE @ 4 percentum
Sr. Goods
No.
1. Agricultural implements not operated manually or not driven by
animal.
2. Areca nut, betel nut and betel nut powder.
3. Bamboo, pulp of bamboo, bamboo paper, bamboo wood and its
articles (other than those covered by item No. 5 of Schedule B).
4. Bearings.
5. Bedsheets , Pillowcover ,quilts , Blanket, towels & other madeups.
6. Belting.
7. Betel leaves.
8. Bicycles, tricycles, cycle rickshaws , Cycle Tyres & Tubes and
parts thereof.
9. Bidi leaves.
10. Biomass Briquettes
11. Bitumen & Coal-tar
12. Bone meal.
13. Bricks of all kind including fly ash bricks, refractory bricks and
asphaltic roofing earthen tiles.
14. Buckets of all kinds except those made of precious metal.
15. Candles
16. Capital Goods.
17. Castings.
18. Castor oil*
19. Centrifugal, mono block and submersible pump sets and parts
thereof.
20. Insecticides, pesticides, rodenticides, fungicides, weedicides,
herbicides,

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21. Coffee beans and seeds, cocoa pod, tea of all kind (whether leaves
or in processed form) and chicory.
22. Coir and coir products excluding coir mattresses.
23. Combs
24. Cottage Cheese (Paneer)
25. Cotton and cotton waste.
26. Crucibles.
27. Cups & glasses of paper/ plastic & Leaf plates and cups (other than
those specified in item No. 35 of Schedule B).
28. Declared goods as specified in section 14 of the Central Sales Tax
Act, 1956 (Central Act, 74 of 1956).
29. Drugs & medicines including vaccines ,syringes & Dressing
Medicated Ointment ,light liquid paraffin of I.P. grade, medical
plant and equipment/ devices & implants.
30. Dry fruits, Wet dates & porridge
31. Edible oils, oil cake
32. Electrodes including welding electrodes and welding rods.
33. Embroidery or Zari articles i.e. imi, zari, kasab,saima, dabka,
chumki , gota sitara,naqsi, kora,glassbeed & badla.*
34. Equipments of all kind for communication such as, Private Branch
Exchange (P.B.X.) and Electronic Private Automatic Branch
Exchange (E.P.A.B.X.) etc.
35. Exercise books (except those specified in item No. 29 of Schedule
B), graph book and laboratory note book.
36. Feeding Bottles & Nipples
37. Ferrous and non-ferrous metals and alloys; non-metals such as
aluminium, copper, zinc and extrusions thereof
38. Fibres of all types and fibre waste.
39. Flour (atta), maida, suji, besan etc.
40. Flyash
41. Fried and roasted grams.
42. Hand pumps and spare parts.
43. Hardware of Iron & Steel (not enameled or plated)*
44. Herbs, bark, dry plants or dry roots, commonly known as jari booti
and dry flowers.
45. Hing (Asafoetida)
46. Honey
47. Hose pipes .& fittings thereof.
48. Hosiery goods.

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49. Husk & Bran of Cereals & Rice Bran

50. Ice.
51. Imitation jewellery
52. Incense sticks commonly known as aggarbati, dhupkathi and dhup
bati.
53. Industrial cables (high voltage cable, XL PE cables, jelly-filled
cables, optical fibre cables).
54. Industrial input and packing materials as may be notified.
55. Insulators
56. Intangible goods of all kind like copyright, patent and
representative licence etc.
57. IT products including computers, telephone (including mobile
handsets ,DVD & CD and parts thereof, teleprinter and wireless
equipments and parts thereof) and other products as may be
notified.
58. Items of food & drinks prepared & sold by dealers running eating
places.
59. Kattha
60. Kerosene Lamps/Lantern, Petromax , Glass chimney
61. Khoya/Khoa
62. Knitting wool
63. Lime,limestone, clinker and dolomite
64. Lignite
65. Linear Alkyl benezene, L.A.B. Sulphonic acid, Alfa Olefin,
Sulphonate.
66. Murmuralu, pelalu, atakutu, puffed rice, muri.
67. Napa slabs & Slates (rough flooring & roofing stones).
68. Newars.
69. Non mechanised Boat used by Fishermen.
70. Ores and minerals.
71. Paddy, rice, wheat and pulses.
72. Paper ,Paper board and news print including computer stationery.
73. Pipes of all varieties including G.I. pipes, C.I. pipes, Ductile pipes
and PVC pipes and fittings thereof.
74. Plastic footwear , Hawai Chappals & Straps thereof.
75. Plastic granules, Plastic Powder & Master batches.
76. Printed material including diary & calander
77. Printing & writing ink excluding toner and cartridges.
78. Processed fruits ,vegetables etc. including fruit jams , jelly, pickles,

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fruit squash, paste, fruit drink & fruit juice (whether in sealed
containers or otherwise)
79. Processed meat, poultry & Fish
80. Rail coaches, engines and wagons and parts thereof.
81. Readymade garments.
82. Refractory monolithic
83. Renewable energy devices and parts thereof.
84. Safety matches.
85. Sales made to Govt. of India or Union Territory or State Govts.
against declaration in form D as provided for under the
C.S.T.Act.1956.
86. Sand & Grit
87. School bags.
88. Scrap, parings & waste of metals, non metals ,glass & plastic
89. Sewing Machines & parts thereof
90. Ship and other water vessels.
91. Silk fabrics (subject to abolition of rental agreement).
92. Skimmed milk powder and UHT Milk.
93. Solvent oils other than organic solvent oil.
94. Spectacles ,parts & components thereof, contact lense & lense
cleaners*
95. Spices of all varities and forms including cumin seed, aniseed,
turmeric and dry chillies.
96. Sports goods including exercise & multi gym equipments ,
accessories & parts thereof
97. Stainless steel sheets*
98. Starch.
99. Sugar and khandsari.**
100. Tamarind including seed & powder
101. Textile fabrics.**
102. Tobacco.**
103. Toys.
104. Tractors, threshers harvesters and attachments and parts thereof.
105. Transmission towers.
106. Umbrella including garden umbrella.
107. Utensils of all kind including Pressure cookers/Pans except utensils
made of precious metals.
108. Vanaspati (hydrogenated vegetable oil).
109. Vegetable oil including gingili oil and bran oil.

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110. Writing instruments (other than those specified in item No. 29 of

Schedule B).
111. Yarn of all type other than cotton and silk yarn in hank and sewing
thread.

Note: **The rate of tax in respect of Sugar, Textile fabrics and Tobacco,
of this Schedule, shall be applicable from the date as the State
Government may notify.

LIST OF INDUSTRIAL INPUTS AND PACKING MATERIALS

(SEE ENTRY NUMBER 54 OF part II of SCHEDULE A)
All items taxable @ 4%
Sr. No. Description
1. Animal (including fish) fats and oils, crude, refined or purified.
2. Animal or vegetable fats boiled, oxidised, dehydrated,
sulphurised, blown, polymerised by heat in vacuum or in inert
gas or otherwise chemically modified; inedible mixtures or
preparations of fats and oils.
3. Glycerol, Crude, Glycerol Waters and Glycerol lyes.
4. Vegetable waxes (other than triglycerides), beeswax, shellac
wax, other insect waxes and spermaceti, whether or not refined
or coloured; degras; residues resulting from the treatment of
fatty substances or animal or vegetable waxes.
5. Liquid glucose (non medicinal).
6. Yeasts (Active or Inactive); other single cell micro organism,
dead (but not including vaccines of prepared baking powders.
7. Denatured ethyl alcohol of any strength.
Ethyl Alcohol of the strength above 110 proof.
8. All ores and concentrates
9. Granulated slag (slag sand) from the manufacture of iron or
steel.
10. Oils and other products of the distillation of high temperature
coal tar; similar products in which the weight of the aromatic
constituents exceeds that of the non-aromatic constituents
11. Benzole
12. Xylole
13. Naphthalene
14. Phenols

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15. Creosote oils

16. Naphtha
17. Natural Gas in Liquefied state (except LPG, Propane and
Butane)
18. Butadiene
19. Natural Gas in Gaseous State other than Compressed Natural
Gas (used as transport fuel)
20. Normal Paraffin and paraffin wax
21. Toluole
22. Fluorine, Chlorine, Bromine and Iodine.
23. Sulphur, sublimed or precipitated; colloidal sulphur.
24. Carbon (carbon blacks and other forms of carbon not elsewhere
specified or included).
25. Hydrogen, rare gases and other non-metals.
26. Alkali or alkaline earth metals; rare earth metals, scandium and
ytrium, whether or not intermixed or inter alloyed; mercury.
27. Sulphuric acid and anhydrides thereof; Oleum.
28. Nitric acid; sulphonitric acids.
29. Diphosphorus pentaoxide; phosphoric acid and polyphosphoric
acids.
30. Oxides of boron; boric acids.
31. Other inorganic acids and other inorganic oxyzen compounds of
non-metals
32. Halides and halide oxides of non-metals.
33. Sulphides of non-metals; commercial phosphorus trisulphide.
34. Ammonia, anhydrous or in aqueous solution.
35. Sodium hydroxide (caustic soda); potassium hydroxides
(caustic potash); peroxides of sodium or potassium.
36. Hydrogen chloride (hydrochloric acid); chlorosulphuric acid.
37. Hydroxide and peroxide of magnesium; oxides, hydroxides and
peroxides of strontium or barium.
38. Artificial corundum, whether or not chemically defined;
aluminum oxide; aluminum hydroxide
39. Aluminum hydroxides.
40. Chromium oxides and hydroxides.
41. Manganese oxides.
42. Iron oxides and hydroxides.
43. Cobalt oxides and hydroxides; commercial cobalt oxides.
44. Titanium oxide.

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45. Hydrazine and hydroxylamine and their inorganic salts; other

inorganic bases; other metal oxides, hydroxides and peroxides.
46. Fluorides; fluorosilicates, fluoroaluminates and other complex
fluorine salts.
47. Chlorides, chloride oxides and chloride hydroxides; bromides
and bromide oxides; iodides and iodide oxides.
48. Hypochlorites; commercial calcium hypochlorite; chlorites,
hypobromites
49. Chlorates and Perchlorates; Bromates and Perbromates; Iodates
and periodates.
50. Sulphides; Polysulphides.
51. Dithionites and sulphoxylates.
52. Sulphides; thiosulphates.
53. Sulphates; alums; peroxosulphates (persulphates)
54. Nitrites, nitrates.
55. Phosphinates (hypophosphites), phosphonates (phosphites);
phosphates and polyphosphates.
56. Carbonates; peroxocarbonates (percarbonates); commercial
ammonium carbonates containing ammonium carbamate.
57. Cyanides, cyanide oxides and complex cyanides.
58. Fulminates, cyanates and thiocynates.
59. Borates; Peroxoborates (perborates).
60. Sodium dichromate.
61. Potassium dischromate.
62. Radioactive chemical elements and radioactive isotopes
(including the fissile chemical elements and isotopes) and their
compounds; mixtures and residues containing these products.
63. Isotopes other than those of heading No.2844: compounds,
inorganic or organic of such isotopes, whether or not
chemically defined.
64. Compounds, inorganic or organic, of rare earth metals of
yttrium or scandium or of mixtures of these metals.

65. Hydrogen peroxide, whether or not solidified with urea.

66. Phosphides, whether or not chemically defined, excluding
ferrophosphorus.
67. Calcium Carbide.
68. Acyclic Hydrcarbons
69. Propylene, Ethylene

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70. Cyclic Hydrocarbons.

71. Halogenated derivatives of Hydrocarbons.
72. Sulphonated, nitrated or nitrosated derivatives of hydrocarbons,
whether or not halogenated.
73. Acyclic alcohols and their Halogenated, Sulphonated, nitrated
or nitrosated derivatives.
74. Methanol
75. Diethylene Glycol, Mono Ethylene Glycol, TriEthylene Glycol,
Ethylene Glycol, Heavy Ethylene Glycol
76. Cyclic alcohols and their halogenated, sulphonated nitrated or
nitrosated derivatives.
77. Phenols and its salts
78. Halogenated, sulphonated, nitrated or nitrosated derivatives of
phenols or phenol-alcohols.
79. Ethers, ether-alcohols peroxides, ether peroxides, ketone
peroxides (whether or not chemically defined) and their
halogenated, sulphonated, nitrated or nitrosated, derivatives.
80. Epoxides, Epoxyalcohols, epoxyphenols and epoxythers, with a
three-membered ring and their halogenated, sulphonated,
nitrated or nitrosated derivatives.
81. Ethylene Oxide
82. Acetals and hemiacetals, whether or not with other oxygen
function and their halogenated, sulphonated, nitrated or
nitrosated derivatives.
83. Aldehyde-function compounds, Aldehydes, whether or not with
other oxygen function; cyclic polymers of aldehydes;
paraformaldehyde.
84. Halogenated, sulphonated, nitrated or nitrosated derivatives of
products of heading No. 2912.
85. Saturated acyclic monocarboxylic acids and their anhydrides,
halides, peroxides and peroxyacids; their halogenated,
sulphonated, nitrated or nitrosated derivatives.
86. Unsaturated acyclic monocarboxylic acids, cyclic
monocarboxylic acids, their anhydrides, halides, peroxides and
peroxyacids; their halogenated, sulphonated, nitrated or
nitrosated derivatives.
87. Polycarboxylic acids, their anhydrides, halides, peroxides and
peroxyacids; their halogenated sulphonated, nitrated or
nitrosated derivatives.

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Dimethyl terephthalate.
Terephthalic Acid and its salt
88. Carboxylic acids with additional oxygen function and their
anhydrides, halides, peroxides and peroxyacids; their
halogenated, sulphanated, nitrated or nitrosated derivatives.
89. Phosphoric esters and their salts, including lactophosphates;
their halogenated, sulphonated, nitrated or nitrosated
derivatives.
90. Esters of other inorganic acids (excluding esters of hydrogen
halides) and their salts, their halogenated, sulphonated, nitrated
or nitrosated derivatives.
91. Amine- function compounds.
92. Oxygen function amino-compounds.
93. Quaternery ammonium salts and hydroxides; lecithins and other
phosphominolipids.
94. Carboxyamide-function compounds; amide-function
compounds of carbonic acid.
95. Carboxyamide-function compounds (including saccharin and its
salts) and imine function compounds.
96. Nitrile-function compounds.
97. Diazo, Azo-or-azoxy-compounds.
98 Organic derivatives of hydrazine or of hydroxylamine.
99. Compounds with other nitrogen function.
100. Organo-sulphur compounds.

101. Others inorganic acid and other inorganic oxygen compounds

of non-metals
102. Sugars, chemically pure,other than
sucrose,lactose,maltose,glucose and fructose: sugar ethers,sugar
acetals and sugar esters and their salts.
103. Heterocyclic compounds with oxygen heteroatom(s) only.
104. Heterocyclic compounds with nitrogen heteroatom(s) only.
105. Nucleic acids and their salts; other heterocyclic compounds.
106. Sulphonamides.
107. Glycosides, natural or reproduced by synthesis and their salts,
ethers, esters and other derivatives.
108. Vegetable alkaloids, natural or reproduced by synthesis, and
their salts, ethers, esters and other derivatives.
109. Other organic compounds.

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110. Tanning extracts of vegetable origin; tannins and their salts,

ethers, esters and other derivatives.
111. Synthetic organic tanning substances; inorganic tanning
substances; tanning preparations, whether or not containing
natural tanning substances; enzymatic preparations for pre-
tanning.
112. Colouring matter of vegetable or animal origin (including
dyeing extracts but excluding animal black), whether or not
chemically defined; preparations based on colouring matter or
vegetable or animal origin
113. Synthetic organic colouring matter, whether or not chemically
defined; preparations based on synthetic organic colouring
matter synthetic organic products of a kind used as fluorescent
brightening agents or as luminophores, whether or not
chemically defined.
114. Colour lakes; preparations based on colour lakes,
115. Other colouring matter;; inorganic products of a kind used as
luminophores, whether or not chemically defined.
116. Glass frit and other glass, in the form of powder, granules or
flakes.
117. Prepared driers.
118. Dyes, acid dyes, alizarine dyes, basic dyes and chemicals.
119. Synthetic flavoring essences.
120. Organic surface active agents (other than soap), surface-active
preparations, washing preparations (including auxiliary washing
preparations) and cleaning preparations, whether or not
containing soap.

121. Lubricating preparations (including cutting-oil preparations,

bold or nut release preparations, anti-rust or anti-corrosion
preparations and mould release preparations, based on
lubricants) and preparations of a kind used for the oil or grease
treatment of textile materials, leather, furskins or other
materials, but excluding preparations containing, as basic
constituents, 70% or more by weight of petroleum oils or of oils
obtained from bituminous minerals.
- Containing petroleum oils or oils obtained from bituminous
minerals :
122. Degreasing Preprations, Wetting Agents Penetrators.

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123. Casein, cascinates and other Casein derivatives, casein glues.

124. Glues derived from bones, hides and similar items; fish glues.
125. Enzymes; prepared enzymes not elsewhere specified or
included.
126. Chemical preparations for photographic uses (other than
varnishes, glues, adhesives and similar preparations); unmixed
products for photographic uses, put up in measured portions or
put up for retail sale in a form ready for use.
127. Artificial graphite; collodial or semicollodial graphite;
preparations based on graphite or other carbon in the form of
pastes, blocks, pastes or other semi-manufacturers.
128. Activated carbon, activated natural mineral products, animal
black, including spent animal black.
129. Residual lyes from the manufacture of wood pulp, whether or
not concentrated, desugared or chemically treated, including
lignin sulphonates, but excluding tall oil of heading No. 38.03.
130. Resin (crude pine gum ),Rosin and resin acids, and derivatives
thereof, rosin spirit and rosin oils, run gums.
131. Reducers and blanket wash/roller wash used in the printing
industry. (organic composite solvents and thinners not
elsewhere specified or included)
132. Wood tar, wood tar oils, wood creosotc, wood naphtha,
vegetable pitch, brewers pitch and similar preparations based on
rosin, resin acids or on vegetable pitch.
133. Finishing agents, dye carriers to accelerate the dyeing or fixing
of due-stuffs and other products and preparations (for example,
dressings and mordants). Of a kind used in textile, paper,
leather or like industries, not elsewhere specified or included.
134. Pickling preparations for metal surfaces; fluxes and other
auxiliary preparations for soldering brazing or welding;
soldering brazing or welding powders and pastes consisting of
metal and other materials; preparations of a kind used as cores
or coatings for welding electrodes or rods.
135. Prepared rubber accelerators, compounded plasticisers for
rubber or plastics, not elsewhere specified or included anti-
oxidising preparations and other compound stabilisers for
rubber or plastics.
136. Reaction initiators, reaction accelerators and catalytic
preparations, not elsewhere specified or included.

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137. Mixed alkylbenzenes and mixed alkylnaphthalenes, other than

those of heading No. 2707 or 2902.
138. Chemical elements doped for use in electronics, in the form of
discs, wafers or similar forms; chemical compounds doped for
use in electronics.
139. Industrial monocarboxylic fatty acids, acid oils from refining,
industrial fatty alcohols.
140. Elctroplating salts
141. Polymers of ethylene in primary forms
142. Polymers of styrene, in primary forms
- Polystyrene:
143. Polymers of vinyl chloride, vinyl acetate or of other
halogenated olefins, in primary forms
144. Acrylic polymers in primary forms.
145. Polyacetals, other polyethers and epoxide resins, in primary
forms, polycarbonates, alkyd resins, polyallylesters and other
polyesters, in primary forms.
146. Polyethylene Terephthalate Chips
147. Polyamides in primary forms.
148. Amino-resins, polyphenylene oxide, phenolic resins and
polyurethanes in primary forms.
149. Silicones in primary forms.
150. Petroleum resins, coumarone-indene resins, polyterpenes,
polysuophides, polysulphones and other products not elsewhere
specified or included in primary forms.
151. Cellulose and its chemical derivatives, and cellulose others, not
elsewhere specified or included in primary forms.
152. Natural polymers (for example, alginic acid) and modified
natural polymers (for example, hardened proteins, chemical
derivatives of natural rubber), not elsewhere specified or
included, in primary forms.
153. Ion-exchangers based on polymers in primary forms.

154. Polymers of propylene or of other olefins, in primary forms.

155. Self-adhesive plates, sheets, film foil, tape, strip of plastic
whether or not in rolls.
156. Flexible plain films.

157. All Articles for conveyance or packing of goods, including

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boxes, cases, crates, containers, carboys, bottles, jerry cans and

their stoppers, lids, caps (but not including insulated ware).
158. Stoppers, caps and lids (including crown corks, screw caps and
pouring stoppers) capsules for bottles, threaded bungs, bung
covers, seals and other packing accessories of base metal.
159. Natural Rubber, balata, gutta percha, Guayule, chicle and
similar natural gums, in primary forms or in plates, sheets or
strips.
160. Synthetic rubber and factice derived from oils in primary forms
or in plates, sheets or strip; mixtures of any product of heading
No. 4001 with any product of this heading, in primary forms or
in plates, sheets or strip.
161. Reclaimed rubber in primary forms or in plates, sheets or strip.
162. Compounded rubber, unvulcanised, in primary forms or in
plates, sheets or strip, other than the forms and articles of
unvulcanised rubber described in heading No. 4006.
163. Veneer
164. Mechanical wood pulp, chemical wood pulp, semi-chemical
wood pulp and pulps of other fibrous cellulosic materials.
165. Cartons (including flattened or folded cartons). Boxes
(including flattened or folded boxes) cases, bags and other
packing containers of paper, paperboard, whether in assembled
or unassembled condition.
166. Paper printed labels and paperboard printed labels.
167. Paper self adhesive tape and printed wrappers used for packing.
168. Partially Oriented Yarn, Polyester Texturised Yarn and waste
thereof.

169. Sacks and bags of a kind used for the packing of goods, of jute
or of other textile based fibres of heading No. 5303.
170. Carboys, bottles, jars, phials, of a kind used for the packing of
goods; stoppers, lids and other closures.
171. Aluminium its alloys and products (except extrusions)
172. Aluminium conductor steel reinforced (ACSR)
173. Acid slurry.
174. Activated Carbon
175. Additives, Salts, Stippers, Passivations, Intermediates and other
chemicals used in Various types of Electroplatings such as
Nickel, Zinc, Copper, Satin Nickel, Chrome Brass, Silver, Gold,

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Aluminium, Lead Tin, Tin Cobalt, etc.

176. Amino Hardener, Epoxy Hardener, Accelator, Epoxy Resins,
UF Resin
177. Basic chromium sulphate, sodium bi-chromate; bleach liquid.
178. Bone sinews.
179. Bones (burnt)
180. Bones (crushed)
181. Boric Acid and Borax Powder.
182. Brackets of bearings.
183. Buttons, Elastic, Zip Paper Foam
184. Caustic and Soda Ash.
185. Emery Powders, Animal Glue, Leather Wheels, Lustre
(Polishing Composition) Cotton Buffs, Namda, Flap Wheels
and all types of polishing materials and steel wire brush.
186. Ethylene Diamine Tetra Acetic Acid, Nitrillo Triacetric Acid
and their Derivatives. (Other organicinorganic compounds)
187. Hand tools.
188. Hosiery knitting needles.
189. Maize starch, glucose D, maize gluten, maize germ & oil.
190. Motor stampings.
191. Nickel Sulphate, Nickel Chloride, Nickel Carbonate, Chromic
Acid, Chrome Salt and other Acids etc.
192. Nitrocellulose Lacquers in Aqueous and Non-Aqueous Medium
193. Nuts and Bolts, screws and fasteners.
194. Organic Composite Solvents / Thinners
195. Paper Cones, Paper Pipes
196. Polyester Staple Fibre waste.
197. Polyester Staple Fibre, Polyester Staple Fibre Fill.
198. Power Coating, Stoving Enamels, Stoving Enamels, Stoving
Primers and Stoving Thinners.
199. Prepared Liquid Pigments and Dye Solutions
200. Pulley.
201. Retarders used in the printing Industry
202. Sodium Acetate, Sodium Sulphate, Hydrogen Peroxide.
203. Sodium Bi Sulphate and Sodium Meta Bi Sulphite
204. Sodium Nitrite, Sodium Nitrate, Potassium Nitrate.
205. Sodium Silicate
206. Sodium Sulphide
207. Turpentine Oil

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208. Wool tops, Acrylic tops, Viscose tops, Nylon tops and blended
tops.
209. Zinc Oxide
210. Light liquid paraphene
211. Camphor
212. Footwear adhesives
213. Electric and Porcelain insulators
214. All type of clay
215. Microcellular sheets, Banwar sheets and Hawai straps
216. Pine Oil
217. Mild steel sheets
218. Soldering Iron,bits, spares and accessories thereof.
219. Polyvenyle acetate emulsion
220. Textile Auxillaries , P.U. adhesives, ethylene oxide condensates
and derivates used in paints, greese ,juit and Textiles.
221. Hasian cloth, Juit clothier/sheets
222. C.N.F.L.,cardinal alkyde resin
223. Purified Terephthalic acid
224. H-17 base oil
225. Copper clad sheets (printed circuit Board)

PART-III:
GOODS TAXABLE @ 12.5 percentum

Sr. Goods
No.
1. All goods other than those specified in PartI, Part-II of
Schedule A, Schedule B, Schedule C and Schedule D.

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SCHEDULE B
(See section 9)
GOODS EXEMPTED FROM TAX
Sr. Goods
No.
1. Agricultural implements manually operated or animal driven.
2. Agriculture or horticulture produce, including herbs or saplings
of trees sold by person or a member of his family, grown by
himself or grown on any land in which he has an interest whether
as owner or usufructuary mortgagee, tenant or otherwise.
3. Aids and implements used by handicapped persons.
4. Animal feed and feed supplements, namely, processed
commodity sold as poultry feed, cattle feed, pig feed, fish feed,
fish meal, prawn feed, shrimp feed and feed supplements and
mineral mixture concentrates, intended for use as feed
supplements including grass, hay and straw, Husk of Pulses,
wheat bran, Additives & Deoiled cakes
5. Articles made of bamboo-wood used for agricultural purposes.
6. Baan.
7. Bangles of all type (except those made of precious metals)
8. Books, periodicals and journals including maps ,charts & Globe.
9. Bread
10. Charcoal.
11. Charkha, Ambar Charkha; handlooms, Himachali handloom
articles, Himachali handloom shawls including Loi & Pattu,
caps and handspun yarn, and Gandhi Topi.
12. Chemical fertilizers and chemical fertilizer mixtures; Bio
fertilizers & micronutrients ,plant regulators and plant growth
nutrients.
13. Coarse grains other than paddy, rice and wheat.
14. Condoms and contraceptives.
15. Cotton yarn in hank and silk yarn in hank.
16. Curd, lassi, butter milk and separated milk.
17. Earthen wares (unglazed)
18. Electric Energy.
19. Fire wood. (When Sold for domestic use)
20. Fishnet, fish fabrics and fish seeds.
21. Foodgrains supplied free of cost by the Government of India,
Targeted P.D.S.(B.P.L.),Antodya Anna Yojna & Annapurna

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Yojna.
22. Fresh fruits.
23. Fresh milk and pasteurised milk.
24. Fresh plants, sapling and fresh flowers.
25. Fresh vegetables.
26. Garlic, ginger, green chillies, onions, potatoes, sweet potatoes,
tapioca and their seeds.
27. Goods sold to the serving military personnel and ex-servicemen
by the Canteen Store Department direct or through authorised
canteen contractors or through unit run canteens.
28. Goods taken under customs bond for re-export after
manufacturing or otherwise.
29. Graphite pencils, writing chalk, Writing Slate & Slate Pencils,
crayons, sketch, pens, drawing colour eraser, sharpener, footrules,
geometry boxes, ink tablets, exercise and drawing books of the
type used in schools and takhties used by students.
30. Gur & Jaggery
31. Hawan Samagri
32. Human blood and blood plasma.
33. Indigenous handmade musical instruments.
34. Kerosene oil sold through Public Distribution System.
35. Khadi Garments & madeups
36. Kirpan
37. Kumkum, bindi, alta and sindur.
38. Leaf plates and leaf-cups (when not compressed).
39. Meat, fish, prawn and other aquatic products when not cured or
frozen; eggs and live stock and animal hair. (Except when sold in
sealed container).
40. Misri, Patasha, Fullian, Makhana and Chirbara
41. National flag.
42. Non-Judicial stamp paper sold by Government Treasuries; postal
items like envelope, postcard etc. sold by Government; rupee
note when sold to the Reserve Bank of India and cheques, loose
or in book form.
43. Organic manure.
44. Papad
45. Rakhi
46. Raw wool.
47. Salt.

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48. Seeds of all kinds except oilseeds

49. Semen including frozen semen.
50. Silk worm laying cocoon and raw silk.
51. Tender green coconut.
52. Water other than
(iii) aerated, mineral, distilled, medicinal, ionic, battery,
demineralised water, and
(iv) water sold in sealed container.

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SCHEDULE C
(See clause (b) of sub-section (1) of section 6)
GOODS SUBJECT TO PURCHASE TAX

Sr.No. Goods
1. 2.
1. Resin (crude pine gum)
2. Khair, Eucalyptus and Popular trees when they have fallen or have
been felled or agreed to be felled including their stumps, roots,
fuel wood and other wood in all forms when purchased from the
growers within the State.

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SCHEDULE D
(See clause (c) of sub-section (1) of section 6)

Sr.No. Goods
1. 2.
1. Motor-spirit (Petrol including Aviation Turbine Fuel and Diesel).
2. Liquor.

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